Private climate change reporting: a discourse of risk and opportunity

Purpose – This paper aims to explore the nature of the emerging discourse of private climate change reporting, which takes place in one-on-one meetings between institutional investors and their investee companies. Design/methodology/approach – Semi-structured interviews were conducted with representatives from 20 UK investment institutions to derive data which was then coded and analysed, in order to derive a picture of the emerging discourse of private climate change reporting, using an interpretive methodological approach, in addition to explorative analysis using NVivo software. Findings – The authors find that private climate change reporting is dominated by a discourse of risk and risk management. This emerging risk discourse derives from institutional investors' belief that climate change represents a material risk, that it is the most salient sustainability issue, and that their clients require them to manage climate change-related risk within their portfolio investment. It is found that institutional investors are using the private reporting process to compensate for the acknowledged inadequacies of public climate change reporting. Contrary to evidence indicating corporate capture of public sustainability reporting, these findings suggest that the emerging private climate change reporting discourse is being captured by the institutional investment community. There is also evidence of an emerging discourse of opportunity in private climate change reporting as the institutional investors are increasingly aware of a range of ways in which climate change presents material opportunities for their investee companies to exploit. Lastly, the authors find an absence of any ethical discourse, such that private climate change reporting reinforces rather than challenges the “business case” status quo. Originality/value – Although there is a wealth of sustainability reporting research, there is no academic research on private climate change reporting. This paper attempts to fill this gap by providing rich interview evidence regarding the nature of the emerging private climate change reporting discourse.

Haircut undone? The Greek drama and prospects for investment arbitration

As a result of the sovereign debt crisis that engulfed Europe in 2010, investors are much more likely to pursue dispute resolution options when faced with losses. This paper seeks to examine the position of investors who suffered losses in the Greek haircut of 2012 in the context of investment treaty arbitration. The paper evaluates arguments that investments in Greek sovereign bonds have been expropriated by the introduction of retrofit CACs and that compensation is payable as a result of the protections offered by BITs. The paper investigates whether sovereign bonds come within the definition of protected investment in BITs, assesses the degree to which CACs act as a jurisdictional bar to investor-state claims and attempts an evaluation of whether claims could be successful. The analysis uses as an illustration recent cases brought against Greece at ICSID. The paper concludes by considering whether the Greek haircut was expropriatory and reflects on the possible outcome of current arbitrations.

Rationality and momentum in real estate investment forecasts

This study examines the rationality and momentum in forecasts for rental, capital value and total returns for the real estate investment market in the United Kingdom. In order to investigate if forecasters are affected by the general economic conditions present at the time of forecast we incorporate into the analysis Gross Domestic Product(GDP) and the Default Spread (DS). The empirical findings show high levels of momentum in the forecasts, with highly persistent forecast errors. The results also indicate that forecasters are affected by adverse conditions. This is consistent with the finding that they tend to exhibit greater forecast error when the property market is underperforming and vice-versa.

Accounting for complex investment transactions

This case study exposes students to complex investment transactions. You must document the following: (1) apply the appropriate accounting literature along with its provisions and justify the order of its application; (2) identify and interpret key facts to classify the given investments and relations; (3) discuss the choice of key assumptions that are central to the analysis; (4) interpret the nature of all investment relations with Holdings; discuss all Owner level and below relations; (5) discuss how accounting for varied levels of influence impact the items reported on/off the face of investors’ financial statements; (6) from DT’s perspective, discuss the potential positives and negatives of its arrangement with Owner with respect to Holdings; and (7) after analyzing additional facts, discuss the nature of the relations of Simon and Herb III with Owner.

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 impact of cross-border real estate investment on commercial real estate capitalisation rates

This study examines the impact of foreign real estate investment on the US office market capitalization rates. The geographic unit of analysis is MSA and the time period is 2001-2013. Drawing upon a database of commercial real estate transactions provided by Real Capital Analytics, we model the determinants of market capitalization rates with a particular focus on the significance of the proportion of market transactions involving foreign investors. We have employed several econometric techniques to explore the data, potential estimation biases, and test robustness of the results. The results suggest statistically significant effects of foreign investment across 38 US metro areas. It is estimated that, all else equal, a 100 basis points increase in foreign share of total investment in a US metropolitan office market causes about an 8 basis points decrease in the market cap rate.

Assessing the accuracy and dispersion of real estate investment forecasts

Existing empirical evidence has frequently observed that professional forecasters are conservative and display herding behaviour. Whilst a large number of papers have considered equities as well as macroeconomic series, few have considered the accuracy of forecasts in alternative asset classes such as real estate. We consider the accuracy of forecasts for the UK commercial real estate market over the period 1999-2011. The results illustrate that forecasters display a tendency to under-estimate growth rates during strong market conditions and over-estimate when the market is performing poorly. This conservatism not only results in smoothed estimates but also implies that forecasters display herding behaviour. There is also a marked difference in the relative accuracy of capital and total returns versus rental figures. Whilst rental growth forecasts are relatively accurate, considerable inaccuracy is observed with respect to capital value and total returns.

Using proxies to calculate the carbon impact of investment into electricity network assets

Replacement and upgrading of assets in the electricity network requires financial investment for the distribution and transmission utilities. The replacement and upgrading of network assets also represents an emissions impact due to the carbon embodied in the materials used to manufacture network assets. This paper uses investment and asset data for the GB system for 2015-2023 to assess the suitability of using a proxy with peak demand data and network investment data to calculate the carbon impacts of network investments. The proxies are calculated on a regional basis and applied to calculate the embodied carbon associated with current network assets by DNO region. The proxies are also applied to peak demand data across the 2015-2023 period to estimate the expected levels of embodied carbon that will be associated with network investment during this period. The suitability of these proxies in different contexts are then discussed, along with initial scenario analysis to calculate the impact of avoiding or deferring network investments through distributed generation projects. The proxies were found to be effective in estimating the total embodied carbon of electricity system investment in order to compare investment strategies in different regions of the GB network.

The evolution and heterogeneity of outward foreign direct investment from Latin America

The PhD dissertation investigates the rise of emerging country multinationals (EMNEs), a phenomenon that has opened up a series of research themes and debates. The main debate in this field is the extent to which the theories/frameworks on foreign direct investment (FDI), which have been developed from investigations on multinationals from developed countries, is relevant in explaining outward FDI from EMNEs. This debate is sparked by research suggesting that EMNEs supposedly do not hold the characteristics that are seen as a prerequisite to engaging in FDI. The underlying theme in this PhD is that the field should move away from a one size fit all categorisation of EMNEs, and explore the heterogeneity within EMNEs. Collecting data through various databases, archival articles and annual reports, there was an examination of the internationalisation process of 136 Latin American Multinationals (LAMNEs). The research explores the differences in internationalisation trajectories and global strategies and classifies firms into one of four categories. The four categories that LAMNEs fall into are: Natural-Resource Vertical Integrator, which are firms that are in resource seeking sectors; Accelerated Global, which depict firms that have become global over a very short period of time; Traditional Global, which are EMNEs that have internationalised at the same pace as developed country MNEs and Local Optimisers that only acquire or internationalise to developing countries. The analysis also looks at which decade LAMNEs engaged in FDI, to see if LAMNEs that internationalised during the 1970s and 1980s, during a time when Latin America had a closed economy, was different to LAMNEs that internationalised during the Washington consensus era of the 1990s or to firms that have only just internationalised within the last decade. The findings show that LAMNEs that internationalised before 1990 were more likely to adopt Local Optimiser strategies. However, more LAMNEs that started to internationalise during the 1990s started to adopt Traditional Global strategies, although Local Optimisers were the most prominent strategy. From 2002, there was more prominence of Accelerated Global strategies and a lot more heterogeneity among LAMNEs. Natural-Resource Vertical Integrator LAMNEs, tended to start to internationalisation process during the 1970s/1980s. Despite the rise of EMNEs, and by extension LAMNEs opting to use cross border merger and acquisitions (M&A), there is little research on whether this entry mode has been successful. Contrary to the argument that EMNEs are “internationalising successfully” through this strategy, the findings show that these firms are highly geared and are running less efficiently against their Western competitors. In comparison, LAMNEs internationalising through a more gradual approach, are outperforming their Western competitors on efficiency and are not highly geared- i.e. do not hold a lot of debt. The conclusion of the thesis is the emphasis of moving away from evaluating firms from their country or region of origin, but rather through the global strategy they are using. This will give a more a robust firm level of analysis, and help develop the understanding of EMNEs and international business theory.

Institutional investors: arbitrageurs or rational trend chasers?

This paper studies the relationship between institutional investor holdings and stock misvaluation in the U.S. between 1980 and 2010. I find that institutional investors overweigh overvalued and underweigh undervalued stocks in their portfolio, taking the market portfolio as a benchmark. Cross-sectionally, institutional investors hold more overvalued stocks than undervalued stocks. The time-series studies also show that institutional ownership of overvalued portfolios increases as the portfolios' degree of overvaluation. As an investment strategy, institutional investors' ride of stock misvaluation is neither driven by the fund flows from individual investors into institutions, nor industry-specific. Consistent with the agency problem explanation, investment companies and independent investment advisors have a higher tendency to ride stock misvaluation than other institutions. There is weak evidence that institutional investors make positive profit by riding stock misvaluation. My findings challenge the models that view individual investors as noise traders and disregard the role of institutional investors in stock market misvaluation.

An Analysis of the Telecommunications Business in China by Linear Regression

In this paper, we study the influence of the National Telecom Business Volume by the data in 2008 that have been published in China Statistical Yearbook of Statistics. We illustrate the procedure of modeling “National Telecom Business Volume” on the following eight variables, GDP, Consumption Levels, Retail Sales of Social Consumer Goods Total Renovation Investment, the Local Telephone Exchange Capacity, Mobile Telephone Exchange Capacity, Mobile Phone End Users, and the Local Telephone End Users. The testing of heteroscedasticity and multicollinearity for model evaluation is included. We also consider AIC and BIC criterion to select independent variables, and conclude the result of the factors which are the optimal regression model for the amount of telecommunications business and the relation between independent variables and dependent variable. Based on the final results, we propose several recommendations about how to improve telecommunication services and promote the economic development.

Improved Road Design for Future Maintenance - Analysis of Road Barrier Repair Costs

The cost of a road construction over its service life is a function of the design, quality of construction, maintenance strategies and maintenance operations. Unfortunately, designers often neglect a very important aspect which is the possibility to perform future maintenance activities. The focus is mainly on other aspects such as investment costs, traffic safety, aesthetic appearance, regional development and environmental effects. This licentiate thesis is a part of a Ph.D. project entitled “Road Design for lower maintenance costs” that aims to examine how the life-cycle costs can be optimized by selection of appropriate geometrical designs for the roads and their components. The result is expected to give a basis for a new method used in the road planning and design process using life-cycle cost analysis with particular emphasis on road maintenance. The project started with a review of literature with the intention to study conditions causing increased needs for road maintenance, the efforts made by the road authorities to satisfy those needs and the improvement potential by consideration of maintenance aspects during planning and design. An investigation was carried out to identify the problems which obstruct due consideration of maintenance aspects during the road planning and design process. This investigation focused mainly on the road planning and design process at the Swedish Road Administration. However, the road planning and design process in Denmark, Finland and Norway were also roughly evaluated to gain a broader knowledge about the research subject. The investigation was carried out in two phases: data collection and data analysis. Data was collected by semi-structured interviews with expert actors involved in planning, design and maintenance and by a review of design-related documents. Data analyses were carried out using a method called “Change Analysis”. This investigation revealed a complex combination of problems which result in inadequate consideration of maintenance aspects. Several urgent needs for changes to eliminate these problems were identified. Another study was carried out to develop a model for calculation of the repair costs for damages of different road barrier types and to analyse how factors such as road type, speed limits, barrier types, barrier placement, type of road section, alignment and seasonal effects affect the barrier damages and the associated repair costs. This study was carried out using a method called the “Case Study Research Method”. Data was collected from 1087 barrier repairs in two regional offices of the Swedish Road Administration, the Central Region and the Western Region. A table was established for both regions containing the repair cost per vehicle kilometre for different combinations of barrier types, road types and speed limits. This table can be used by the designers in the calculation of the life-cycle costs for different road barrier types.

The Determinants of Recovery Rates on Defaulted Corporate Securities: Why do Fallen Angels recover more than Original High Yield Issues?

Regression analysis has shown that recovery rates are determined by a variety of conditions at the time of default. These conditions can be broken into five major categories: (1) a security's seniority within the capital structure of the defaulting firm, (2) the type of default event, (3) firm-specific factors, (4) industry-specific factors, and (5) macroeconomic factors. Expectations of these inputs determine the expected recovery rate if default were to occur, thereby determining credit ratings and security prices. Although it is widely understood how recovery rate estimates influence credit rating assignments (the higher the expected recovery rate, the higher the assigned credit rating), no research, to the best of my knowledge, has investigated the reasons why higher rated securities recover more than lower rated securities in the event of default. Specifically, this paper will empirically investigate why securities originally rated investment grade, fallen angels, recover more than securities originally rated high yield in the event of default.

Revising the Program Portfolio: Elevating Academic Program Performance and Strategic Alignment

At many institutions, program review is an underproductive exercise. Review of existing programs is often a check-the-box formality, with inconsistent criteria and little connection to institutional priorities or funding considerations. Decisions about where to concentrate resources across the portfolio can be highly politicized. This report profiles how academic planning exemplars use program review as a strategic tool, integrating data on academic quality, student demand, and resource utilization to improve the economics of challenged programs and prioritize programs for investment and expansion.

On the economic and fiscal effects of infrastructure investment in Brazil

This article studies the productive impact of infrastructure investment in Brazil. Public-capital expenditures in the country have decreased continuously over the last two decades, and this paper shows the significant impact this has had on infrastructure stocks. Cointegration analysis is used to investigate the long-run association between output and infrastructure, the results being then used to study the short-run dynamic of these variables. Whether in the short or long run, the productive impact of infrastructure was found to be relevant. Other group of simulations studies the impact of expanding capital expenditures through debt finance on debt to GDP ratio as well as on public cash áow and net worth.