Precisely wrong or roughly right? An evaluation of development viability appraisal modelling

Purpose – The purpose of this paper is to investigate the effect of choices of model structure and scale in development viability appraisal. The paper addresses two questions concerning the application of development appraisal techniques to viability modelling within the UK planning system. The first relates to the extent to which, given intrinsic input uncertainty, the choice of model structure significantly affects model outputs. The second concerns the extent to which, given intrinsic input uncertainty, the level of model complexity significantly affects model outputs. Design/methodology/approach – Monte Carlo simulation procedures are applied to a hypothetical development scheme in order to measure the effects of model aggregation and structure on model output variance. Findings – It is concluded that, given the particular scheme modelled and unavoidably subjective assumptions of input variance, that simple and simplistic models may produce similar outputs to more robust and disaggregated models. Evidence is found of equifinality in the outputs of a simple, aggregated model of development viability relative to more complex, disaggregated models. Originality/value – Development viability appraisal has become increasingly important in the planning system. Consequently, the theory, application and outputs from development appraisal are under intense scrutiny from a wide range of users. However, there has been very little published evaluation of viability models. This paper contributes to the limited literature in this area.

Mapping evidence gaps in anti-corruption: assessing the state of the operationally relevant evidence on donors' actions and approaches to reducing corruption

This paper charts the current evidence on effectiveness of different anti-corruption reforms, and identifies significant evidence gaps. Despite a substantial amount of literature on corruption, this review found very few studies focusing on anti-corruption reforms, and even fewer that credibly assess issues of effectiveness and impact. The evidence was strong for only two types of interventions: public financial management (PFM) reforms and supreme audit institutions (SAIs). For PFM, the evidence in general showed positive results, whereas the effectiveness was mixed for SAIs. No strong evidence indicates that any of the interventions pursued have been ineffective, but there is fair evidence that anti-corruption authorities, civil service reforms and the use of corruption conditionality in aid allocation decisions in general have not been effective. The paper advocates more operationally-relevant research and rigorous evaluations to build up the missing evidence base, particularly in conflict-afflicted states, in regards to the private sector, and on the interactions and interdependencies between different anti-corruption interventions.

Hot and cold IPO markets : the case of the stock exchange of Mauritius

The aim of this study is to assess the characteristics of the hot and cold IPO markets on the Stock Exchange of Mauritius (SEM). The results show that the hot issues exhibit, on average, a greater degree of underpricing than the cold issues, although the hot issue phenomenon is not a significant driving force in explaining this short-run underpricing. The results are consistent with the predictions of the changing risk composition hypothesis in suggesting that firms going public during hot markets are on average relatively more risky. The findings also support the time adverse selection hypothesis in that the firms’ quality dispersion is statistically different between hot and cold markets. Finally, the study concludes that firms which go public during hot markets do not underperform those going public in cold markets over the longer term.

Internal equity financing and the performance of multinational subsidiaries in emerging economies

We examine the internal equity financing of the multinational subsidiary which retains and reinvests its own earnings. Internal equity financing is a type of firm-specific advantage (FSA) along with other traditional FSAs in innovation, research and development, brands and management skills. It also reflects subsidiary-level financial management decision-making. Here we test the contributions of internal equity financing and subsidiary-level financial management decision-making to subsidiary performance, using original survey data from British multinational subsidiaries in six emerging countries in the South East Asia region. Our first finding is that internal equity financing acts as an FSA to improve subsidiary performance. Our second finding is that over 90% of financing sources (including capital investment by the parent firms) in the British subsidiaries come from internal funding. Our third finding is that subsidiary-level financial management decision-making has a statistically significant positive impact on subsidiary performance. Our findings advance the theoretical, empirical and managerial analysis of subsidiary performance in emerging economies.

The persistence of distance: a gravity model of European cross-border real estate development flows

Purpose – This paper aims to investigate the scale and drivers of cross-border real estate development in Western Europe and Central and Eastern Europe. Design/methodology/approach – Placing cross-border real estate development within the framework of foreign direct investment (FDI), conceptual complexities in characterizing the notional real estate developer are emphasized. Drawing upon a transaction database, this paper proxies cross-border real estate development flows with asset sales by developers. Findings – Much higher levels of market penetration by international real estate developers are found in the less mature markets of Central and Eastern Europe. Analysis suggests a complex range of determinants with physical distance remaining a consistent barrier to cross-border development flows. Originality/value – This analysis adds significant value in terms of understanding cross-border real estate development flows. In this study, a detailed examination of the issues based on a rigorous empirical analysis through gravity modelling is offered. The gravity framework is one of the most confirmed empirical regularities in international economics and commonly applied to trade, FDI, migration, foreign portfolio investment inter alia. This paper assesses the extent to which it provides useful insights into the pattern of cross-border real estate development flows.

The role of Investment Management Systems in regulatory compliance: a Post-Financial Crisis study of displacement mechanisms

The financial crisis of 2007–2009 and the resultant pressures exerted on policymakers to prevent future crises have precipitated coordinated regulatory responses globally. A key focus of the new wave of regulation is to ensure the removal of practices now deemed problematic with new controls for conducting transactions and maintaining holdings. There is increasing pressure on organizations to retire manual processes and adopt core systems, such as Investment Management Systems (IMS). These systems facilitate trading and ensure transactions are compliant by transcribing regulatory requirements into automated rules and applying them to trades. The motivation of this study is to explore the extent to which such systems may enable the alteration of previously embedded practices. We researched implementations of an IMS at eight global financial organizations and found that overall the IMS encourages responsible trading through surveillance, monitoring and the automation of regulatory rules and that such systems are likely to become further embedded within financial organizations. We found evidence that some older practices persisted. Our study suggests that the institutionalization of technology-induced compliant behaviour is still uncertain.

Transcending borders with international top management teams: a study of European financial multinational corporations

This paper investigates how changes in firm degree of internationalization are associated with the configuration of top management teams (TMT) based on a dataset of 41 large European firms in the banking and insurance industry, including detailed career profiles of the 264 executives that were serving on the TMTs of these firms at year-end 2002. Our findings suggest firms tend to match top executive profiles to their strategies. Entry into new foreign markets and new cultural zones was found to be associated with higher levels of international capacity at TMT level, whereas changes in international posture per se are not related to TMT international capacity. We discuss the interplay between firm strategies and internal structures in the context of firm internationalization and suggest directions for future research on TMTs

The effect of financial leverage on real and accrual-based earnings management

Past research has documented a substitution effect between real earnings management (RM) and accrual-based earnings management (AM), depending on relative costs. This study contributes to this research by examining whether levels of (and changes in) financial leverage have an impact on this empirically documented trade-off. We hypothesise that in the presence of high leverage, firms that engage in earnings manipulation tactics will exhibit a preference for RM due to a lower possibility—and subsequent costs—of getting caught. We show that leverage levels and increases positively and significantly affect upward RM, with no significant effect on income-increasing AM, while our findings point towards a complementarity effect between unexpected levels of RM and AM for firms with very high leverage levels and changes. This is interpreted as an indication that high leverage could attract heavy outsider scrutiny, making it necessary for firms to use both forms of earnings management in order to achieve earnings targets. Furthermore, we document that equity investors exhibit a significantly stronger penalising reaction to AM vs. RM, indicating that leverage-induced RM is not as easily detectable by market participants as debt-induced AM, despite the fact that the former could imply deviation from optimal business practices.

Financial protection in the UK building industry: bonds, retentions and guarantees

Financial Protection in the UK Building Industry provides comprehensive treatment of a complex aspect of construction management which is increasingly important in modern construction contracts. The term 'Financial Protection' refers to refers to the various mechanisms by which funds are made available to ensure the due performance of a partys contractual obligations. This book is based on material written for a research project funded by the Reading Construction Forum. Financial Protection in the UK Building Industry looks at the legal and economic background to the problem of providing financial protection to clients to guard against poor performance and or the insolvency of contractors, consultants and sub-contractors. The inclusion of practical guidance notes and summaries makes this a valuable guide for the construction professional as well as for the researcher. * provides in-depth analysis of financial protection measures * explores the ways in which financial protection can increase efficiency in the industry * financial protection in construction is beset with problems - this book points toward practical solutions

Contemporary organizational theory in the management of construction projects

The level of insolvencies in the construction industry is high, when compared to other industry sectors. Given the management expertise and experience that is available to the construction industry, it seems strange that, according to the literature, the major causes of failure are lack of financial control and poor management. This indicates that with a good cash flow management, companies could be kept operating and financially healthy. It is possible to prevent failure. Although there are financial models that can be used to predict failure, they are based on company accounts, which have been shown to be an unreliable source of data. There are models available for cash flow management and forecasting and these could be used as a starting point for managers in rethinking their cash flow management practices. The research reported here has reached the stage of formulating researchable questions for an in-depth study including issues such as how contractors manage their cash flow, how payment practices can be managed without damaging others in the supply chain and the relationships between companies" financial structures and the payment regimes to which they are subjected.

Cash flow management in construction firms

The level of insolvencies in the construction industry is high, when compared to other industry sectors. Given the management expertise and experience that is available to the construction industry, it seems strange that, according to the literature, the major causes of failure are lack of financial control and poor management. This indicates that with a good cash flow management, companies could be kept operating and financially healthy. It is possible to prevent failure. Although there are financial models that can be used to predict failure, they are based on company accounts, which have been shown to be an unreliable source of data. There are models available for cash flow management and forecasting and these could be used as a starting point for managers in rethinking their cash flow management practices. The research reported here has reached the stage of formulating researchable questions for an in-depth study including issues such as how contractors manage their cash flow, how payment practices can be managed without damaging others in the supply chain and the relationships between companies’ financial structures and the payment regimes to which they are subjected.

The economic dimensions of integrating flood management and agri-environment through washland creation: a case from Somerset, England

In many river floodplains in the UK, there has been a long history of flood defence, land reclamation and water regime management for farming. In recent years, however, changing European and national policies with respect to farming, environment and flood management are encouraging a re-appraisal of land use in rural areas. In particular, there is scope to develop, through the use of appropriate promotional mechanisms, washland areas, which will simultaneously accommodate winter inundation, support extensive farming methods, deliver environmental benefits, and do this in a way which can underpin the rural economy. This paper explores the likely economic impacts of the development of flood storage and washland creation. In doing so, consideration is given to feasibility of this type of development, the environmental implications for a variety of habitats and species, and the financial and institutional mechanisms required to achieve implementation. (C) 2007 Elsevier Ltd. All rights reserved.

An investigation of the existing situation and trends in building energy efficiency management in China

According to the Chinese State Council's "Building Energy Efficiency Management Ordinance", a large-scale investigation of energy efficiency (EE) in buildings in contemporary China has been carried out in 22 provincial capitals and major cities in China. The aim of this project is to provide reliable information for drawing up the "Decision on reinforcing building energy efficiency" by the Ministry of Construction of China. The surveyed organizations include government departments, research institutions, property developers, design institutions, construction companies, construction consultancy services companies, facility management departments, financial institutions and those which relate to the business of building energy efficiency. In addition, representatives of the media and residents were also involved. A detailed analysis of the results of the investigation concerning aspects of the cur-rent situation and trends in building energy consumption, energy efficiency strategy and the implementation of energy efficiency measures has been conducted. The investigation supplies essential information to formulate the market entrance policy for new buildings and the refurbishment policy for existing buildings to encourage the development of energy efficient technology.