Valuing brand equity of a geographic region

There is much anecdotal evidence and academic argument that the location of a business influences its value. That is, some businesses appear to be worth more than others because of their location. This is particularly so in the tourism industry. Within the domain of the destination literature, many factors can be posited on why business valuation varies, ranging from access to markets, availability of labor, climate, and surrounding services. Given that business value is such a fundamental principle that underpins the viability of the tourist industry through its relationship with pricing, business acquisition, and investment, it is surprising that scant research has sought to quantify the relative premium associated with geographic locations. This study proposes a novel way in which to estimate geographic brand premium. Specifically, the approach translates valuation techniques from financial economics to quantify the incremental value derived from businesses operating in a particular geographic region, and produces a geographic brand premium. The article applies the technique to a well-known tourist destination in Australia, and the results are consistent with a positive value of brand equity in the key industries and are of a plausible order of magnitude. The article carries strong implications for business and tourism operators in terms of valuation, pricing, and investment, but more generally, the approach is potentially useful to local authorities and business associations when deciding how much resource and effort should be devoted to brand protection.

Property and valuation education : an analysis of UWS property students from 1994 to 2006

The valuation and property is an evolving industry and the participants within the industry are also changing. This change is due to improved technology and construction, global nature of business today, professional standards, legal and accounting issues and environmental matters. Throughout this change in the property industry, there has also been significant change in the structure and content of tertiary property courses in Australia. Over the past thirteen years each first year cohort commencing study in the property program at the University of Western Sydney have been surveyed in relation to their background, reasons for course selection and job expectations. This paper will review this annual survey and the profile of all first year students who commenced their studies in the Bachelor of Business (Property) degree [formerly Bachelor of Commerce (Property Economics) and Bachelor of Commerce (Land Economy)] for years commencing 1994 to 2006. The paper will also provide a detailed analysis of the type of student entering the property industry and their exposure to the valuation and property sectors prior to commencing their studies.

Ownership structure and business evaluation practices in family SMEs : evidence from empirical research in Italy

This paper presents early results from a pilot project which aims to investigate the relationship between proprietary structure of small and medium- sized Italian family firms and their owners’ orientation towards a “business evaluation process”. Evidence from many studies point out the importance of family business in a worldwide economic environment: in Italy 93% of the businesses are represented by family firms; 98% of them have less than 50 employees (Italian Association of Family Firms, 2004) so we judged family SMEs as a relevant field of investigation. In this study we assume a broad definition of family business as “a firm whose control (50% of shares or voting rights) is closely held by the members of the same family” (Corbetta,1995). “Business evaluation process” is intended here both as “continuous evaluation process” (which is the expression of a well developed managerial attitude) or as an “immediate valuation” (i.e. in the case of new shareholder’s entrance, share exchange among siblings, etc). We set two hypotheses to be tested in this paper: the first is “quantitative” and aims to verify whether the number of owners (independent variable) in a family firm is positively correlated to the business evaluation process. If a family firm is led by only one subject, it is more likely that personal values, culture and feelings may affect his choices more than “purely economic opportunities”; so there is less concern about monitoring economic performance or about the economic value of the firm. As the shareholders’ number increases, economic aspects in managing the firm grow in importance over the personal values and "value orientation" acquires a central role. The second hypothesis investigates if and to what extent the presence of “non- family members” among the owners affects their orientation to the business evaluation process. The “Cramer’s V” test has been used to test the hypotheses; both were not confirmed from these early results; next steps will lead to make an inferential analysis on a representative sample of the population.

Valuation of family firms : the limitations of accounting information

This conceptual paper explores the extent to which reported accounting information captures unique family firm decision-making and intangible asset factors that impact financial value. We review the family firm valuation-relevant literature and identify that this body of research is predicated on the assumption that accounting information reflects the underlying reality of family firms. This research, however, fails to recognise that current accounting technology does not fully recognise the family firm factors in the book value of the firm or the implications for long run persistence of earnings. Thus, valuation models underpinning the extant empirical research, which are predicated on reported accounting information, may not fully reflect the intrinsic value of family firms. We present propositions on the interaction between accounting information, family factors and valuation as a road map for future empirical research with a discussion of appropriate methodologies.

The valuation accuracy of multiples in mergers and acquisitions, and their association with firm misvaluation

This study explores the accuracy and valuation implications of the application of a comprehensive list of equity multiples in the takeover context. Motivating the study is the prevalent use of equity multiples in practice, the observed long-run underperformance of acquirers following takeovers, and the scarcity of multiplesbased research in the merger and acquisition setting. In exploring the application of equity multiples in this context three research questions are addressed: (1) how accurate are equity multiples (RQ1); which equity multiples are more accurate in valuing the firm (RQ2); and which equity multiples are associated with greater misvaluation of the firm (RQ3). Following a comprehensive review of the extant multiples-based literature it is hypothesised that the accuracy of multiples in estimating stock market prices in the takeover context will rank as follows (from best to worst): (1) forecasted earnings multiples, (2) multiples closer to bottom line earnings, (3) multiples based on Net Cash Flow from Operations (NCFO) and trading revenue. The relative inaccuracies in multiples are expected to flow through to equity misvaluation (as measured by the ratio of estimated market capitalisation to residual income value, or P/V). Accordingly, it is hypothesised that greater overvaluation will be exhibited for multiples based on Trading Revenue, NCFO, Book Value (BV) and earnings before interest, tax, depreciation and amortisation (EBITDA) versus multiples based on bottom line earnings; and that multiples based on Intrinsic Value will display the least overvaluation. The hypotheses are tested using a sample of 147 acquirers and 129 targets involved in Australian takeover transactions announced between 1990 and 2005. The results show that first, the majority of computed multiples examined exhibit valuation errors within 30 percent of stock market values. Second, and consistent with expectations, the results provide support for the superiority of multiples based on forecasted earnings in valuing targets and acquirers engaged in takeover transactions. Although a gradual improvement in estimating stock market values is not entirely evident when moving down the Income Statement, historical earnings multiples perform better than multiples based on Trading Revenue or NCFO. Third, while multiples based on forecasted earnings have the highest valuation accuracy they, along with Trading Revenue multiples for targets, produce the most overvalued valuations for acquirers and targets. Consistent with predictions, greater overvaluation is exhibited for multiples based on Trading Revenue for targets, and NCFO and EBITDA for both acquirers and targets. Finally, as expected, multiples based Intrinsic Value (along with BV) are associated with the least overvaluation. Given the widespread usage of valuation multiples in takeover contexts these findings offer a unique insight into their relative effectiveness. Importantly, the findings add to the growing body of valuation accuracy literature, especially within Australia, and should assist market participants to better understand the relative accuracy and misvaluation consequences of various equity multiples used in takeover documentation and assist them in subsequent investment decision making.

Environmental information provision, market valuation, and firm incentives: An empirical study of the Japanese PRTR system

The environmental performance of a listed firm could affect its level of investment in pollution prevention and its access to financial markets. Previous studies using Tobin's q that explore market response to environmental performance do not distinguish between the impact of performance on investment and market response, which may mislead conclusions. To overcome this problem, we simultaneously estimate the functions of the intangible asset, the replacement cost, and the toxic chemical risk. We find that the Japanese financial market does not value risk associated with toxic chemical releases. Nevertheless, even without market valuation, firms increase investment to reduce pollution. © 2010 by the Board of Regents of the University of Wisconsin System.

The use of ecosystem services valuation in Australian coastal zone management

The use and influence of ecosystem services valuation in management decision-making, particularly as it relates to coastal zone management, remains largely unexplored in the academic literature. A recent Australia-wide survey of decision-makers involved in coastal zone management examined if, how and to what extent economic valuation of coastal and marine ecosystem services is used in, and influences, decision-making in Australia. The survey also identified a set of cases where economic valuation of ecosystem services was used for decision-making, and reasons why economic values may or may not be considered in the decision-making process. This paper details the method and results from this survey. Overall, there is strong empirical evidence that economic valuation of ecosystem services is used, but with important variation across coastal and marine management contexts. However, the impact of ecosystem services valuation on policy appears to be globally weak.

Is economic valuation of ecosystem services useful to decision-makers? Lessons learned from Australian coastal and marine management

Economic valuation of ecosystem services is widely advocated as a useful decision-support tool for ecosystem management. However, the extent to which economic valuation of ecosystem services is actually used or considered useful in decision-making is poorly documented. This literature blindspot is explored with an application to coastal and marine ecosystems management in Australia. Based on a nation-wide survey of eighty-eight decision-makers representing a diversity of management organizations, the perceived usefulness and level of use of ecosystem services economic valuation in support of coastal and marine management are examined. A large majority of decision-makers are found to be familiar with economic valuation and consider it useful - even necessary - in decision-making, although this varies across decision-makers groups. However, most decision-makers never or rarely use it. The perceived level of importance and trust in estimated dollar values differ across ecosystem services, and are especially high for values that relate to commercial activities. A number of factors are also found to influence respondent’s use of economic valuation. Such findings concur with conclusions from other existing works, and are instructive to reflect on the issue of the usefulness of ESV in environmental management decision-making. They also confirm that the survey-based approach developed in this application represents a sound strategy to examine this issue at various scales and management levels.

Endangerment and Likeability of Wildlife Species: How Important are they for Payments Proposed for Conservation?

This paper examines empirically the relative influence of the degree of endangerment of wildlife species and their stated likeability on individuals' allocation of funds for their conservation. To do this, it utilises data obtained from the IUCN Red List, and likeability and fund allocation data obtained from two serial surveys of a sample of the Australian public who were requested to assess 24 Australian wildlife species from three animal classes: mammals, birds and reptiles. Between the first and second survey, respondents were provided with extra information about the focal species. This information resulted in the dominance of endangerment as the major influence on the allocation of funding of respondents for the conservation of the focal wildlife species. Our results throw doubts on the proposition in the literature that the likeability of species is the dominant influence on willingness to pay for conservation of wildlife species. Furthermore, because the public's allocation of fund for conserving wildlife species seems to be more sensitive to information about the conservation status of species than to factors influencing their likeability, greater attention to providing accurate information about the former than the latter seems justified. Keywords: Conservation of wildlife species; Contingent valuation; Endangerment of species; Likeability of species; Willingness to pay

Health information management : What business are we in?

Developments in information technology will drive the change in records management; however, it should be the health information managers who drive the information management change. The role of health information management will be challenged to use information technology to broker a range of requests for information from a variety of users, including he alth consumers. The purposes of this paper are to conceptualise the role of health information management in the context of a technologically driven and managed health care environment, and to demonstrat e how this framework has been used to review and develop the undergraduate program in health information management at the Queensland University of Technology.