1984 research outputs found
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Diversification Benefits of REIT Preferred and Common Stock: New Evidence from a Utility based Framework
Get PDFWe study the diversification benefits of REIT preferred and common stock using a utility based framework in which investors segment based on risk aversion. Taking the view of a long run investor, we conduct our analysis using data from 1992 to 2012. We examine optimal mean-variance portfolios of investors with different levels of risk aversion given access to different classes of assets and establish two main results. First, REIT preferred and common stock provides significant diversification benefits to investors. REIT common stock helps low risk aversion investors attain portfolios with higher returns, while REIT preferred stock helps high risk aversion investors by providing a venue for risk reduction. Both asset classes receive material allocations over plausible levels of risk aversion. Second, while REIT preferred stock appears to behave somewhat like a hybrid debt/equity asset, its risk/return profile appears to not easily be replicated by those asset classes. When given the opportunity, investors will reduce allocations to REIT common stock and investment grade bonds and invest in REIT preferred stock
Hotel Sustainability Benchmarking (HSB) Study
Get PDF[Excerpt] This document presents the results of the first Cornell Hotel Sustainability Benchmarking (HSB) study of hotel carbon and energy data from the 2012 calendar year, which may evolve and repeat annually. By developing industry benchmarks, a more thorough understanding of attributes affecting energy usage and carbon emissions can be advanced. Lessons learned can be applied to both internal and external stakeholder audiences with the end goal of reducing the environmental impact of hotel operations
CEO Bonus: Alternative Performance Measurement versus Gamesmanship
Get PDFAlthough CEO bonus plans traditionally use net income as the standard performance measure, there is an increasing trend that CEOs influence directors to adopt alternative non-GAAP performance metrics in setting bonuses. In this study, we analyze the managerial consequences of this alternative bonus contract design in the Real Estate Investment Trusts (REITs) industry. REITs provide a unique setting since most firms have been using FFO, an industry-specific non-GAAP performance measure, rather than net income, to determine CEO bonuses. Essentially, FFO consists of two components: net income, which is a GAAP measure, and a non-GAAP component that includes adjustments from net income made by firms. We examine to what extent CEO bonus arises as the result of manipulating these components. We also examine whether regulatory standards related to non-GAAP reporting and bonus disclosures are effective in mitigating such manipulation. Lastly, we analyze if good corporate governance constrains managerial opportunistic behavior. Our findings show, when given a choice to manipulate a GAAP versus a non-GAAP component, firms primarily choose to manage the non-GAAP component to increase bonuses. We further show that regulatory compensation disclosure standards and good governance mechanisms are important in reducing such manipulation. In additional analysis, we find that firms report less manipulation for bonus purposes in the post-financial crisis period, and CEO bonuses are higher at firms that report positive manipulations. Moreover, we do not find any association between FFO manipulation and other forms of compensation that are not directly linked to the FFO measure in compensation contract design. Finally, we show that capital market participants penalize firms’ manipulative activities on FFO, especially when such activities are accompanied by large CEO bonuses
The Political Economy of Discretionary Spending: Evidence from the American Recovery and Reinvestment Act
No full textWe study in this paper the spatial allocation of expenditures in the American Recovery and Reinvestment Act (ARRA), one of the largest discretionary funding bills in the history of the United States. Contrary to both evidence from previous fiscal stimulus programs and standard theories of legislative politics, we do not find evidence of substantial political targeting. The districts of party leaders did not receive more funds than those of rank and-file legislators, nor did the districts of pivotal voters in the Senate or swing voters in the House receive more money. While Democratic districts overall received more per resident than Republican districts, this differential nearly disappears when we consider award per worker in each district or when we control for district poverty rate. Democratic states did receive modestly greater funds, but this is largely due to higher levels of funding going to places with more generous state welfare programs. At the same time, we find no relationship between the amount awarded and measures of the severity of the downturn in the local economy, while we do find more funds flowing to districts with higher levels of economic activity and greater incidence of poverty. The results are consistent with the discretionary component of ARRA being allocated through funding formulas or based on project characteristics other than countercyclical efficacy or political expediency, which stands in contrast to evidence from fiscal stimulus in the New Deal. One explanation suggests that over the past century, legislative norms have reduced the scope of discretion—with attendant benefits and costs
Touch Versus Tech: When Technology Functions as a Barrier or a Benefit to Service Encounters
No full textInterpersonal exchanges between customers and frontline service employees increasingly involve the use of technology, such as point-of-sale terminals, tablets, and kiosks. The present research draws on role and script theories to demonstrate that customer reactions to technology-infused service exchanges depend on the presence of employee rapport. When rapport is present during the exchange, the use of technology functions as an interpersonal barrier preventing the customer from responding in kind to employee rapport-building efforts, thereby decreasing service encounter evaluations. However, during service encounters in which employees are not engaging in rapport building, technology functions as an interpersonal barrier, enabling customers to retreat from the relatively unpleasant service interaction, thereby increasing service encounter evaluations. Two analyses using J.D. Power Guest Satisfaction Index data support the barrier and beneficial effects of technology use during service encounters with and without rapport, respectively. A follow-up experiment replicates this data pattern and identifies psychological discomfort as a key process that governs the effect. For managers, the results demonstrate the inherent incompatibility of initiatives designed to encourage employee–customer rapport with those that introduce technology into frontline service exchanges
When Do Female-Owned Businesses Out-Survive Male-Owned Businesses? A Disaggregated Approach by Industry and Geography
No full textStudies have invoked several theoretical perspectives to explain differences between female-owned businesses and male-owned businesses. Yet, few have considered the possibility that differential outcomes between female-owned businesses and male-owned businesses vary from setting to setting, an insight that we derive by combining social constructionism with feminist theory. We articulate hypotheses regarding the outcome of business survival duration based on this insight. Then, using a dataset of one million Texan proprietorships, we test these hypotheses by estimating separate gender effects for many individual industries and geographic areas. We find that female-owned businesses consistently out-survive male-owned businesses in many industries and areas
The Effect of Customer Information during New Product Development on Profits from Goods and Services
No full textPurpose
– This study aims to investigate how customer information obtained at different phases of a new product development (NPD) process influences profits from new offerings.
Design/methodology/approach
– A survey was conducted in the context of NPD in goods and services. A unique database was constructed that merged key informant survey responses with financial data for 244 firms. This database was used to replicate and extend previous research by posing a number of hypotheses regarding the role of obtaining customer information in NPD.
Findings
– The results show that obtaining customer information during NPD influences the profits from new offerings, which vary depending on the phase of the NPD process. The financial rewards from obtaining customer information for goods are highest in the early phases of the NPD process and decline in later phases. The financial rewards for services, on the other hand, are high in the early and late phases of the NPD process.
Research limitations/implications
– The research is based on a survey combined with objective financial data, that is, a combination of different data sources. The research would have benefitted from longer data series and a higher response rate.
Originality/value
– This study replicates and extends previous research by testing the role of obtaining customer information in both manufacturing and service firms by combining survey data with objective financial data
The Curtailment Mortgage: A Proposal to Benefit Homeowners
Get PDFThe Obama administration’s effort to encourage homeowners to refinance their mortgages under the Home Affordable Refinance Program (HARP) represents a reasonable approach at helping homeowners benefit from the current low mortgage rates. The HARP reduces the high costs of refinancing and in some cases makes refinancing possible for properties whose values have fallen below the mortgages’ values. While this will provide the intended benefit of increasing the homeowners’ income by reducing their mortgage payments, a closer inspection of the refinancing process in the US reveals that the current treatment of prepayment in US mortgages provides a disincentive for homeowners to accumulate equity in their houses. We propose a new mortgage contract, one which augments the terms of the existing conventional fixed-rate mortgage, which encourages homeowner equity accumulation thus leading to a more stable housing sector that can better weather future house price declines. From an economic policy perspective, the ability to reduce long term debt payments will have the same economic effect of increasing household’s permanent income which can provide a boost to the economy. This new mortgage proposal can be implemented by the government at little to no cost
An Estimate of the Value of a Hotel Management Agreement in Involuntary Termination Settings
Get PDFThe spreadsheet is prepared for use in conjunction with the Cornell University School of Hotel Administration Center for Hospitality Research Report entitled Calculating Damage Awards in Hotel Management Agreement Terminations by Jan A. deRoos and Scott D. Berman. The spreadsheet is provided as an example of an estimate of the value of a HMA as an academic exercise. The individual pages are a methodical approach that follows the outline of the article: Estimate hotel revenues and expenses into the future (first three tabs give 10-year proforma) Estimate fees (next three tabs) Present Value the fees (PV Calcs) Summarize and add any additional losses (last tab)
The spreadsheet accommodates an HMA of up to 100 years duration and a termination date in any month
Environmental Management Certification (ISO 14001): Effects on Hotel Guest Reviews
Get PDFA survey of guests at 6,850 hotels in Spain found that the guests gave higher satisfaction ratings to hotels that held the ISO 14001 certification than to hotels without the certification. As an international standard aiming at development of effective environmental management systems, the ISO 14001 standard specifies a path for the continuous improvement and the control of a firm’s environmental performance. The study explored the differences in the overall customer ratings for the certified hotels overall and for several individual services and attributes, including housekeeping and overall comfort. Interestingly, the most significant differences were found between upscale 4-star hotels with and those without certification, while differences relating to certification in 5- and 3-star hotels were muted. While the study does not reveal causes for these findings, the implication is that the highest-end luxury hotels do not gain distinctive differentiation by having the ISO 14001 certification, while for 3-star hotels, guests’ price sensitivity apparently overrides environmental concerns. That said, the results imply that acquiring ISO 14001 certification may give upscale hotels a distinctive asset that leads them to a competitive advantage over similar non-certified properties. Moreover, ISO 14001 seems to contribute to the value creation by the hotels, based on their higher guest ratings