Ming‐Long Lee, Kevin C.H. Chiang and Chia‐Wei Lin
During the height of the financial/credit crisis of 2008, the US Internal Revenue Service issued temporary guidance that permits REITs (real estate investment trusts) to retain…
Abstract
Purpose
During the height of the financial/credit crisis of 2008, the US Internal Revenue Service issued temporary guidance that permits REITs (real estate investment trusts) to retain cash and pay “effective stock dividends” through 2009 to meet their income distribution requirement. The purpose of this study is to investigate the policy implications of this guidance on shareholders' wealth and the intra‐industry effects for non‐event, rival REITs when event REITs announced elective stock dividends.
Design/methodology/approach
This study identified the announcements of the Revenue Procedures 2008‐68 and 2009‐15 and subsequent six equity REITs announcing the distribution of effective stock dividends in the first quarter of 2009. To assess their implications, this study adopted the event study methodology and multivariate regressions to examine the REIT price reactions and their distribution to the Revenue Procedure announcements and to the elective stock dividend announcements, respectively.
Findings
The Revenue Procedure announcements have positive wealth effects on the entire REIT market and REITs with higher leverage enjoy larger abnormal returns. During firm stock dividend announcement windows, non‐event, rival REITs have higher positive price reactions when the event firm and the non‐event firm are not alike and their returns have a low correlation coefficient, when the event firm has a large negative abnormal price reaction, and when the event firm pays cash/stock dividends in the mixture of 40 percent:60 percent, instead of 10 percent:90percent.
Practical implications
The results will help REIT investors to make better decisions. This study produces important implications for investors to pick REITs which are likely to experience higher returns at periods of turmoil when announcements about dividend policy changes are expected.
Originality/value
To the best of the authors' knowledge, this is the first study looking into intra‐industry effects of REIT dividend announcements and the policy implications of the elective REIT stock dividends permitted by the US Internal Revenue Service. The results of this study show that the informational signals associated with these announcement events are rich and have intra‐industry implications on REIT share prices.
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Ming‐Te Lee, Bang‐Han Chiu, Ming‐Long Lee, Kevin C.H. Chiang and V. Carlos Slawson
US real estate investment trusts (REITs) typically distribute more dividends than required by tax regulations. This paper aims to focus on discretionary dividends, and examines…
Abstract
Purpose
US real estate investment trusts (REITs) typically distribute more dividends than required by tax regulations. This paper aims to focus on discretionary dividends, and examines the impact of information asymmetry on this excess component of dividends.
Design/methodology/approach
This paper considers a set of US REITs with reported taxable income figures over the 2000‐2007 period, and employs regression analysis to examine the influence of information asymmetry on the excess component of dividends. The explained variable is specified as excess dividends scaled by total assets. Excess dividends are dividends paid over the mandatory dividend payments calculated with taxable income, instead before‐tax net income. Following the REIT studies of Hardin and Hill and Han, this study employs Tobin Q as the proxy for asymmetric information.
Findings
Contrary to Hardin and Hill's conclusion, but consistent with dividend signaling theory as well as agency cost explanations, the results indicate that REITs with higher level of asymmetric information pay out significantly more excess dividends. Nevertheless, in contrast to Deshmukh's study on manufacturing firms, the REIT results are against the prediction of the pecking order theory.
Originality/value
The paper is one of the few studies that explicitly examine the factors influencing REIT decision on discretionary dividends. Contrast to previous studies, this study is able to obtain taxable income and compute the discretionary dividends more accurately. Furthermore this paper is able to provide evidence against the pecking order theory, which is not investigated in the existing REIT dividend studies.
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Kevin C.H. Chiang and Ming‐Long Lee
Existing studies provide conflicting results regarding whether real estate investment trusts (REITs) effectively optimize and diversify institutional portfolios. Based on the…
Abstract
Existing studies provide conflicting results regarding whether real estate investment trusts (REITs) effectively optimize and diversify institutional portfolios. Based on the style analysis of Sharpe, we extend Liang and McIntosh’s study with a more complete set of asset classes over a longer sample period. We provide additional evidence suggesting that practicing analysts should include REITs as an asset class to optimize their portfolios. Specifically, our results show that the price behavior of REITs is unique and cannot be satisfactorily duplicated by combining equity, fixed‐income securities, and unsecuritized real estate. The time series of the styles on REITs indicates that it is difficult to ex ante produce returns on REITs without diversifying into REITs.
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Weiping Li, Huirong Li, Xuan Sean Sun and Tairan Kevin Huang
The purpose of this paper is to examine the impact of directors’ and officers’ liability insurance (D&O insurance hereafter) on corporate governance and firm performance, with a…
Abstract
Purpose
The purpose of this paper is to examine the impact of directors’ and officers’ liability insurance (D&O insurance hereafter) on corporate governance and firm performance, with a specific focus on investment efficiency.
Design/methodology/approach
Using a sample of Chinese A-share listed firms from the period 2007 to 2020, this study uses Ordinary Least Squares regressions to investigate the research questions, as well as moderating and mediating effects. Additionally, alternative measures of investment efficiency are used, and the Heckman two-stage model and propensity score matching model are used to demonstrate the consistency of the findings and to mitigate the risk of endogeneity.
Findings
The findings of this study suggest that purchasing D&O insurance has a detrimental impact on corporate investment efficiency, particularly in the context of over-investment activities; robust internal governance mechanisms, exemplified by a higher shareholding ratio of the top shareholder and enhanced internal control quality, alleviate this negative effect; and financing constraints act as a mediating factor in the association between D&O insurance and investment efficiency.
Originality/value
Corporate investment efficiency is of significant importance for both national macroeconomic growth and micro-enterprise development. Notably, the prevalence of D&O insurance among Chinese firms is progressively increasing, thus exerting a growing influence. This study contributes to the existing literature on D&O insurance and corporate investment efficiency, providing valuable insights into the economic impact of D&O insurance on Chinese firms. The empirical evidence presented herein facilitates future reforms and adjustments.
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Mingming Ge, Xin-Lei Zhang, Kaleb Brookshire and Olivier Coutier-Delgosha
The openings on aircraft structures can be modeled from an aerodynamical point of view as lid-driven cavities (LDC). This paper aims to show the primary verification and…
Abstract
Purpose
The openings on aircraft structures can be modeled from an aerodynamical point of view as lid-driven cavities (LDC). This paper aims to show the primary verification and validation (V&V) process in computational fluid dynamics (CFD, and to investigate the influences of numerical settings on the efficiency and accuracy for solving the LDC problem.
Design/methodology/approach
To dig into the details of CFD approaches, this paper outlines the design, implementation, V&V and results of an efficient explicit algorithm. The parametric study is performed thoroughly focusing on various iteration methods, grid density discretization terms and Reynolds number effects.
Findings
This study parameterized the numerical implementation which provides empirical insights into how computational accuracy and efficiency are affected by changing numerical settings. At a low Reynolds number (not over 1,000), the time-derivative preconditioning is necessary, and k = 0.1 can be the optimal value to guarantee the efficiency, as well as the stability. A larger artificial viscosity (c = 1/16) would relieve the calculating oscillation issue but proportionally increase the discretization error. Furthermore, the iteration method and the mesh quality are two key factors that affect the convergence efficiency, thus need to be selected “wisely”.
Practical implications
The study shows how numerical implementation can enhance an accurate and efficient solution. This workflow can be used to determine the best parameter settings whenever CFD researchers applying this LDC problem as a complementary design tool for testing newly developed solvers.
Originality/value
The studied LDC problem is representative of CFD analysis in real aircraft structures. These numerical simulations provide a cost-effective and convenient tool to understand the parameter sensitivity, solution receptivity and physics of the CFD process.
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Nuraddeen Abubakar Nuhu, Kevin Baird and Ranjith Appuhami
This study examines the association between the use of a package of contemporary and a package of traditional management accounting practices with organizational change and…
Abstract
Purpose
This study examines the association between the use of a package of contemporary and a package of traditional management accounting practices with organizational change and organizational performance.
Methodology/approach
Data were collected based on a mail survey distributed to a sample of 740 public sector organizations.
Findings
The findings indicate that while the prevalence of traditional practices is still dominant, such practices were not associated with organizational change or performance. Rather, those organizations that use contemporary management accounting practices to a greater extent experienced greater change and stronger performance.
Practical implications
The findings suggest that contemporary management accounting practices can assist public sector practitioners in improving performance and promoting organizational change.
Originality/value
The study provides an empirical insight into the use and effectiveness of management accounting practices in the public sector. The study provides the first empirical analysis of the effect of using a package of management accounting practices in the public sector.
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Karin Sanders, Rebecca Hewett and Huadong Yang
Human resource (HR) process research emerged as a response to questions about how (bundles of) HR practices related to organizational outcomes. The goal of HR process research is…
Abstract
Human resource (HR) process research emerged as a response to questions about how (bundles of) HR practices related to organizational outcomes. The goal of HR process research is to explain variability in employee and organization outcomes by focusing on how HR practices are intended (adopted) by senior managers, the way that these HR practices are implemented and communicated by line managers, and how employees perceive, understand, and attribute these HR practices. In the first part of this chapter, we present a review of 20 years of HR process research from the start, to how it developed, and is now maturing. Within the body of HR process research, several different research theoretical streams have emerged, which are largely studied in isolation without benefiting from each other. Therefore, in the second part of this chapter, we draw on previous work to propose a staged process model in which we integrate the different research streams of HR process research, recognizing contingencies in the model. This leads us to an agenda for future research and practical implications in the final part of the chapter.
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Alastair W. Watson, Babak Taheri, Steven Glasgow and Kevin D. O’Gorman
Augmenting employees’ commitment is of important interest to hospitality managers, particularly in the branded restaurant industry where the workforce is often transient. This…
Abstract
Purpose
Augmenting employees’ commitment is of important interest to hospitality managers, particularly in the branded restaurant industry where the workforce is often transient. This paper aims to identify and analyse if levels of personal motivation and flow are drivers of commitment, and if the relationship between the variables is moderated by length of service, age and gender.
Design/methodology/approach
The study is a large-scale empirical investigation of hospitality staff in the UK branded restaurants through 1,133 survey responses, measuring levels of personal motivation, flow and commitment, as well as the moderating effects of multi-group differences among age, gender and length of service. Partial least square structural equation modelling (PLS-SEM) is used for analysis of data.
Findings
Using PLS-SEM found personal motivation to be important in determining employees’ level of flow and, in turn, employees’ commitment. Using multi group analysis, results revealed that relationship among personal motivation, flow and commitment played superior role for older employees and working for a long time in a hospitality organisation than those younger and working less than five years. No significant differences between male and female staff are found.
Research limitations/implications
Through finding flow and personal motivations to be drivers of commitment, branded restaurant practitioners can focus on emphasising these elements in their employees to increase commitment. Further, part-time roles are often taken by people likely to be non-committal in their job needs, e.g. students funding their studies. By focussing on extending lengths of service to meet the optimum years identified, managers can fortify their businesses.
Originality/value
The paper is one of few large-scale quantitative studies to examine personal motivation, flow and commitment in the context of UK branded restaurants. It identifies that employees exhibit higher levels of commitment through intrinsic values over time, and establishes relationships between the constructs of flow, personal motivation and commitment.
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Yuk Fai Kevin Au, Marta K. Dowejko, Ka Wai Boby Shiu and Zhujun Ding