The cyclical behaviour of sector and regional diversification benefits: 1987-2002

This paper investigates the time series behaviour of the relative benefits of sector and regional diversification strategies, using the notion of cross-sectional dispersion introduced by Solnik and Roulet (2000). Using monthly data over the period 1987:1 to 2002:12, four sector and four regional classifications are examined in the UK. The results indicate that sector and regional dispersion indices are highly time varying and so dwarf any lower frequency cyclical components that may be present. Nonetheless, periods of high dispersion are closely followed by periods of low dispersion, suggestive of cyclical behaviour of sector and regional diversification benefits. Then, using the HP-filter we isolated the cyclical component of the various dispersion indices and found that the sector dispersion indices are generally above the regional dispersion indices. This implies that a sector diversification strategy is likely to offer greater risk reduction benefits than a regional diversification approach. Nonetheless, we find that in some periods, certain regional diversification strategies are of equal or greater benefit than certain sector approaches. The results also appear to be quite sensitive to the classifications of sectors and regions. Hence, the appropriate definition of sectors and regions can have important implications for sector and regional diversification strategies.

Tenant mix variety in regional shopping centres: some UK empirical analyses

The variety and quality of the tenant mix within a shopping centre is a key concern in shopping centre management. Tenant mix determines the extent of externalities between outlets in the centre, helps establish the image of the centre and, as a result, determines the attractiveness of the centre for consumers. This then translates into sales and rents. However, the management of tenant mix has largely been based on perceived “optimum” arrangements and industry rules of thumb. This paper attempts to model the impact of tenant mix on the rent paid by retailers in larger UK shopping centres and, hence, the returns made by shopping centre landlords. It extends work on shopping centre rent determination (see Working Paper 10/03) utilising a database of 148 regional shopping centres in the UK, with detailed data for over 1900 tenants. Econometric models test the relationship between rental levels and the levels of retail concentration and diversity, while controlling for a range of continuous and qualitative characteristics of each tenant, each retail product, and each shopping centre. Factor analysis is then used to extract the core retail and service categories from the tenant lists of the 148 shopping centres. The factor scores from these core retailer factors are then tested against rent payable. The results from the empirical analysis allow us to generate some clear analytical and empirical implications for optimal retail management.

Ownership Advantages in Cross-border Real Estate Development: Some Evidence from European Markets

Drawing upon European industry and country case studies, this paper investigates the scope and drivers of cross-border real estate development. It is argued that the real estate development process encompasses a diverse range of activities and actors. It is inherently localised, the production process is complex and emphermal, and the outputs are heterogeneous. It analyses a transactions database of European real estate markets to provide insights into the extent of, and variations in, market penetration by non-domestic real estate developers. The data were consistent with the expectation that non-domestic real estate developers from mature markets would have a high level of market penetration in immature markets. Compared to western European markets, the CEE real estate office sales by developers were dominated by US, Israeli and other EU developers. This pattern is consistent with the argument that non-domestic developers have substantial Dunning-type ownership advantages when entering immature real estate markets. However, the data also suggested some unexpected patterns. Relative to their GDP, Austria, Belgium, Denmark, Sweden, Netherlands and Israel accounted for large proportions of sales by developers. All are EU countries (except Israel) with small, open, affluent, highly traded economies. Further, the data also indicate that there may be a threshold where locational disadvantages outweigh ownership advantages and deter cross-border real estate development.

Regional implications of macro-economic, sectoral and company changes in the development of technopoles in Britain and France

This paper reports the proceedings of a conference held at Reading University in 1993 which addressed the issues of new technological developments at the regional and sub-regional levels in Britain and France. These new technological clusters - the `Technopoles' - are investigated in a series of papers in both English and French which examines their spatial, sectoral and economic aspects to determine what lessons can be learned from their development and what their future economic significance is likely to be. Two recurring themes are of particular significance in the papers - the link between R& D and regional development, and the different forms which innovation assumes within the various technopoles under scrutiny.

Why the home region matters: location and regional multinationals

Much of the literature in international business analysing the multinational enterprise uses the country as the relevant environmental parameter. This paper presents both theoretical and empirical evidence to demonstrate that country-level analysis now needs to be augmented by analysis at the ‘regional’ level of the broad triad markets of Europe, North America and the Asia Pacific. The great majority of the world's 500 largest firms concentrate their activities within their home region of the triad. This study uses variance component analysis and finds that this home region effect outperforms the country effect. Together, the regional and industry effects explain most of the geographic expansion of multinational enterprises (MNEs), whereas country, firm and year effects are very minor. The new data and variance component analysis on the activities of large MNEs reported here suggest that new thinking is required about the importance of large regions of the triad as the relevant unit of analysis for business strategy to supplement the conventional focus on the country.

A randomised, double-blind, placebo controlled cross-over study to determine the gastrointestinal effects of consumption of arabinoxylanoligosaccharides enriched bread in healthy volunteers

BACKGROUND: Prebiotics are food ingredients, usually non-digestible oligosaccharides, that are selectively fermented by populations of beneficial gut bacteria. Endoxylanases, altering the naturally present cereal arabinoxylans, are commonly used in the bread industry to improve dough and bread characteristics. Recently, an in situ method has been developed to produce arabinoxylan-oligosaccharides (AXOS) at high levels in breads through the use of a thermophilic endoxylanase. AXOS have demonstrated potentially prebiotic properties in that they have been observed to lead to beneficial shifts in the microbiota in vitro and in murine, poultry and human studies. METHODS: A double-blind, placebo controlled human intervention study was undertaken with 40 healthy adult volunteers to assess the impact of consumption of breads with in situ produced AXOS (containing 2.2 g AXOS) compared to non-endoxylanase treated breads. Volatile fatty acid concentrations in faeces were assessed and fluorescence in situ hybridisation was used to assess changes in gut microbial groups. Secretory immunoglobulin A (sIgA) levels in saliva were also measured. RESULTS: Consumption of AXOS-enriched breads led to increased faecal butyrate and a trend for reduced iso-valerate and fatty acids associated with protein fermentation. Faecal levels of bifidobacteria increased following initial control breads and remained elevated throughout the study. Lactobacilli levels were elevated following both placebo and AXOS-breads. No changes in salivary secretory IgA levels were observed during the study. Furthermore, no adverse effects on gastrointestinal symptoms were reported during AXOS-bread intake. CONCLUSIONS: AXOS-breads led to a potentially beneficial shift in fermentation end products and are well tolerated.

Identifying key knowledge needs for evidence-based conservation of wild insect pollinators: a collaborative cross-sectoral exercise

In response to evidence of insect pollinator declines, organisations in many sectors, including the food and farming industry, are investing in pollinator conservation. They are keen to ensure that their efforts use the best available science. We convened a group of 32 ‘conservation practitioners’ with an active interest in pollinators and 16 insect pollinator scientists. The conservation practitioners include representatives from UK industry (including retail), environmental non-government organisations and nature conservation agencies. We collaboratively developed a long list of 246 knowledge needs relating to conservation of wild insect pollinators in the UK. We refined and selected the most important knowledge needs, through a three-stage process of voting and scoring, including discussions of each need at a workshop. We present the top 35 knowledge needs as scored by conservation practitioners or scientists. We find general agreement in priorities identified by these two groups. The priority knowledge needs will structure ongoing work to make science accessible to practitioners, and help to guide future science policy and funding. Understanding the economic benefits of crop pollination, basic pollinator ecology and impacts of pesticides on wild pollinators emerge strongly as priorities, as well as a need to monitor floral resources in the landscape.

Clusters, connectivity and catch-up: Bollywood and Bangalore in the Global Economy

In this article, we make two important contributions to the literature on clusters. First, we provide a broader theory of cluster connectivity that has hitherto focused on organization-based pipelines and MNE subsidiaries, by including linkages in the form of personal relationships. Second, we use the lens of social network theory to derive a number of testable propositions. We propose that global linkages with decentralized network structures have the highest potential for local spillovers. In the emerging economy context, our theory implies that clusters linked to the global economy by decentralized pipelines have potential for in-depth catch-up, focused in industry and technology scope. In contrast, clusters linked through decentralized personal relationships have potential for in-breadth catch-up over a range of related industries and technologies. We illustrate our theoretical propositions by contrasting two emerging economy case studies: Bollywood, the Indian filmed entertainment cluster in Mumbai and the Indian software cluster in Bangalore.

The role of UK development industry in Brownfield regeneration Vol 2

As part of the SUBR:IM work (www.subrim.org.uk) being undertaken at The College, the research team for this project (Tim Dixon, Yasmin Pocock and Mike Waters) has produced the first two of three volumes covering Stage 2 of the research. Volume 1 examines the results from the national UK developer interviews (carried out in 2004-2005); National Land Use Database (NLUD) analysis (1998-2003); and residential planning permission analysis for Salford/Manchester and Barking & Dagenham (2000-2004) using Estates Gazette Interactive (EGi) data and published information. Volume 2 covers the sub-regional context for Thames Gateway and Greater Manchester, which form the basis for the case studies (these are to be published as Volume 3 Volume 2 (of 3): Sub-regional context (Thames Gateway and Greater Manchester)

Speculative bubbles and the cross-sectional variation in stock returns

Evidence suggests that rational, periodically collapsing speculative bubbles may be pervasive in stock markets globally, but there is no research that considers them at the individual stock level. In this study we develop and test an empirical asset pricing model that allows for speculative bubbles to affect stock returns. We show that stocks incorporating larger bubbles yield higher returns. The bubble deviation, at the stock level as opposed to the industry or market level, is a priced source of risk that is separate from the standard market risk, size and value factors. We demonstrate that much of the common variation in stock returns that can be attributable to market risk is due to the co-movement of bubbles rather than being driven by fundamentals.

Regional business networks in the multinational retail sector

This article examines the network relationships of a set of large retail multinational enterprises (MNEs). We analyze under what conditions a flagship-network strategy (characterized by a network of five partners – the MNE, key suppliers, key partners, selected competitors and key organisations in the non-business infrastructure) explains the internationalisation of three retailers whose geographic scope, sectoral conditions and competitive strategies differ substantially. We explore why and when retailers will adopt a flagship strategy. The three firms are two U.K.-based multinational retailers (Tesco and The Body Shop) and a French-based global retailer (Moët Hennessy Louis Vuitton). We find evidence of strong network relationships for all three retailers, although each embraces network strategies for different reasons. Their flagship relationships depend on each retailer's strategic use of firm-specific-advantages (FSAs) and country-specific advantages (CSAs). We find that a flagship strategy can succeed in overcoming internal and/or environmental constraints to cross-border resource transfers, which are barriers to foreign direct investment (FDI). We provide recommendations on why and when to use a flagship-based strategy and which type of network partners to prioritize in order to succeed internationally.

Observational constraints on atmospheric and oceanic cross-equatorial heat transports: revisiting the precipitation asymmetry problem in climate models

Satellite based top-of-atmosphere (TOA) and surface radiation budget observations are combined with mass corrected vertically integrated atmospheric energy divergence and tendency from reanalysis to infer the regional distribution of the TOA, atmospheric and surface energy budget terms over the globe. Hemispheric contrasts in the energy budget terms are used to determine the radiative and combined sensible and latent heat contributions to the cross-equatorial heat transports in the atmosphere (AHT_EQ) and ocean (OHT_EQ). The contrast in net atmospheric radiation implies an AHT_EQ from the northern hemisphere (NH) to the southern hemisphere (SH) (0.75 PW), while the hemispheric difference in sensible and latent heat implies an AHT_EQ in the opposite direction (0.51 PW), resulting in a net NH to SH AHT_EQ (0.24 PW). At the surface, the hemispheric contrast in the radiative component (0.95 PW) dominates, implying a 0.44 PW SH to NH OHT_EQ. Coupled model intercomparison project phase 5 (CMIP5) models with excessive net downward surface radiation and surface-to-atmosphere sensible and latent heat transport in the SH relative to the NH exhibit anomalous northward AHT_EQ and overestimate SH tropical precipitation. The hemispheric bias in net surface radiative flux is due to too much longwave surface radiative cooling in the NH tropics in both clear and all-sky conditions and excessive shortwave surface radiation in the SH subtropics and extratropics due to an underestimation in reflection by clouds.

An examination of cross-border strategies in banking

The paper examines the process of bank internationalisation and explores how banks become international organisations and what this involves. It also makes an assessment of the significance of their international operations and determines whether banks are truly global organisations. The empirical data are based on the 60 largest banks in the world and content analysis is used to categorise the information into the eight international strategies of Atamer, Calori, Gustavsson, and Menguzzato-Boulard [Internationalisation strategies. In R. Calori, T. Atamer, & P. Nunes (Eds.), The dynamics of international competition – from practice to theory, strategy series (pp. 162–206). London: Sage (2000)] and Bryan, Fraser, Oppenheim, and Rall [Race for the World strategies to build a great global firm. Boston, MA: Harvard Business School Press (1999)]. The findings suggest that the majority of banks focus on countries or geographic regions in which they have some sort of cultural or economic affinity. Moreover, apart from a relatively small number of very large banks, they are international rather than truly global organisations.

Decadal predictability of regional-scale peak winds over Europe using the Earth System Model of the Max-Planck-Institute for Meteorology

The predictability of high impact weather events on multiple time scales is a crucial issue both in scientific and socio-economic terms. In this study, a statistical-dynamical downscaling (SDD) approach is applied to an ensemble of decadal hindcasts obtained with the Max-Planck-Institute Earth System Model (MPI-ESM) to estimate the decadal predictability of peak wind speeds (as a proxy for gusts) over Europe. Yearly initialized decadal ensemble simulations with ten members are investigated for the period 1979–2005. The SDD approach is trained with COSMO-CLM regional climate model simulations and ERA-Interim reanalysis data and applied to the MPI-ESM hindcasts. The simulations for the period 1990–1993, which was characterized by several windstorm clusters, are analyzed in detail. The anomalies of the 95 % peak wind quantile of the MPI-ESM hindcasts are in line with the positive anomalies in reanalysis data for this period. To evaluate both the skill of the decadal predictability system and the added value of the downscaling approach, quantile verification skill scores are calculated for both the MPI-ESM large-scale wind speeds and the SDD simulated regional peak winds. Skill scores are predominantly positive for the decadal predictability system, with the highest values for short lead times and for (peak) wind speeds equal or above the 75 % quantile. This provides evidence that the analyzed hindcasts and the downscaling technique are suitable for estimating wind and peak wind speeds over Central Europe on decadal time scales. The skill scores for SDD simulated peak winds are slightly lower than those for large-scale wind speeds. This behavior can be largely attributed to the fact that peak winds are a proxy for gusts, and thus have a higher variability than wind speeds. The introduced cost-efficient downscaling technique has the advantage of estimating not only wind speeds but also estimates peak winds (a proxy for gusts) and can be easily applied to large ensemble datasets like operational decadal prediction systems.

Variation on the effects of the 2003 CAP reform and regional differences in the Italian olive oil sector

This paper analyses the impacts of the 2003 CAP reform on the production of Italian olive oil controlling for the regional differences in olive oil production as well as for the differences between years. Italian olive oil production time series data from the Farm Accountancy Data Network for the 2000-2010 period at regional level is used to examine the effect of the 2003 Fischler reform on the production of olive oil. Production costs and payments received by farmers to support their income are considered. The data were collected at micro level based on a sample of farms representative of the production systems in the country. In order to consider the differences in production among the regions, eight representative regions in terms of surveyed farms are considered: Liguria, Toscana, Umbria, Lazio, Campania, Calabria, Puglia and Sicilia. We found that the most important factors affecting the production of olive oil are the area under olive groves and labour productivity. Results also show no evidence that the level of payments have an impact to the level of production, however, the type of payments has. Future work should explore the impact of the 2003 reform into the technical and production efficiency of the Italian olive oil farmers. It would be interesting to link the measures introduced by the cross compliance and the management practices of the different farms to have a more complete picture of the various parameters influencing the production of olive oil.