Clawback Provisions in Real Estate Investment Trusts

Using a sample of 195 unique real estate investment trusts (REITs), we examine factors related to the adoption of clawback provisions within managerial compensation contracts. In general, we find strong and consistent empirical evidence that clawback provision are directly related to firm size, complexity, leverage, growth options, monitoring incentives, and CEO performance incentives. We also find that clawbacks are associated with enhanced market and accounting performance, with stronger performance relations observed for adoption decisions tied directly to regulatory mandates. In sum, we conclude compensation clawback provisions represent a value-relevant, strategic governance mechanism for REITs

Advisor Choice in Asia-Pacific Property Markets

This paper examines advisor choice decisions by publicly traded REITs and listed property companies in Asia-Pacific real estate markets. Using a sample of 168 firms, we find robust evidence that firms strategically evaluate and compare the increased agency costs associated with external advisement against the potential benefits associated with collocating decision rights with location specific soft information. Our empirical results reveal real estate companies tend to hire external advisors when they invest in countries: 1) that are more economically and politically unstable, 2) whose legal system is based on civil law, 3) where the level of corruption is perceived to be high, and 4) when disclosure is relatively poor. Additionally, we find the probability of retaining an external advisor is directly related to the expected agency costs. Lastly, we find evidence of return premiums in excess of 13 % for firms whose organizational structure matches their investment profile. As such, we conclude that the decision to hire an external advisor represents a value relevant trade-off between the costs and benefits of this organizational arrangement

Capital Structure and Political Risk in Asia-Pacific Real Estate Markets

This study investigates the determinants of capital structure decisions by real estate firms, with a specific focus on the impact of political risk on leverage. Using a sample of Asia-Pacific REITs and listed property trusts, we find those firms with properties located in countries characterized by relatively high degrees of political risk, such as political instability, and/or greater uncertainty in the ability to repatriate and monetize profits from international investment activities, employ less debt than their counterparts operating in more politically stable environments. This core finding remains robust to alternative sample selection criteria including the division of the sample into high versus low market-to-book value firms, and also holds within the subset of organizations that are active in raising additional capital in the secondary markets

Why Schedules Slip: Actual Reasons for Schedule Problems across Large Air Force System Development Efforts

The three main objectives of this research were to identify the actual reasons for schedule problems across large Air Force system development efforts, to quantity the importance of each category of reasons in terms of frequency and severity, and to demonstrate that the reasons for schedule problems are not program unique, but are common across system development efforts. To this end, this thesis contains a categorization and analysis of 549 reasons for schedule difficulties on 22 large Air Force Engineering and Manufacturing Development (EMD) programs from 1981 to 1994. These aircraft, missile, aircraft equipment, aircraft upgrade, and simulator programs had contract values ranging from $40M to over$10B. All reasons were extracted from narrative explanations of negative schedule variances contained in contractor generated Cost Performance Reports (CPRs). Reasons for schedule problems were placed into categories, and categories were ranked by frequency of problems, total schedule variance (in dollars), and total schedule variance (in work days). Seven categories (technical problems, late subcontractors, manufacturing problems, design changes, late data, contracting, and staffing) accounted for 49 percent of the frequency, 57 percent of the schedule variance (in dollars), and 49 percent of the schedule variance (in work days)

The Impact of Geographic and Cultural Dispersion on Information Opacity

This paper investigates the influences of intrafirm geographic and cultural dispersion, the distance between the location of a firm’s investments and its headquarters, on the firm’s information environment. Specifically, using a sample of publicly traded real estate companies across the Asia-Pacific region, we examine how intrafirm geographic and cultural distance impacts a firm’s capital acquisition costs. As a consequence of both the heavily regulated operating environment faced by these firms, as well as the capital intensive nature of this industry, funding costs should be of pronounced importance to firms within this sector. Consistent with this paradigm, we find that firms with geographically disperse investments exhibit enhanced informational opacity. Specifically, firms with more geographically disperse investments exhibit higher capital acquisition costs than their more geographically concentrated counterparts. Similarly, firms with more culturally disparate investments also exhibit enhanced informational opacity, as evidenced by increased capital costs. Additionally, we present evidence that the impact of both physical and cultural distance is increasing following the global financial crisis. Taken together, our results provide strong evidence that both intrafirm geographic and cultural dispersion materially impact both an organization’s information environment and funding costs

The Natural History of Globus Pharyngeus

Globus pharyngeus is a common disorder and accounts for 5% of all ENT referrals. Objectives. To evaluate the role of barium swallow and endoscopy in these patients, to ascertain the incidence, if any, of aerodigestive tract malignancy in this group and to assess the natural evolution of globus pharyngeus. Materials and Methods. Seventy-nine patients underwent barium swallow and rigid oesophagoscopy for globus pharyngeus between January 2005 and October 2008. Fifty-five patients were contacted by phone on average 5 years and 3 months after intervention and asked if their symptoms still persisted. Twenty-four patients were uncontactable or lost to followup, three patients were deceased, two of cardiac related disease and one of renal failure. Results. The majority of patients, 36 of 55 (65%), had a normal barium swallow. Forty-five of 55 (82%) of patients had normal rigid endoscopies. Thirty-one of 55 (56%) patients were at an average followup time of 5 years and 3 months. No patient developed a malignant lesion. Conclusion. Globus pharyngeus is a relatively common but benign condition of indeterminate origin. Our study demonstrates that many of these patients spontaneously improve with time

Open vent volcanoes fuelled by depth-integrated magma degassing

Open-vent, persistently degassing volcanoes—such as Stromboli and Etna (Italy), Villarrica (Chile), Bagana and Manam (Papua New Guinea), Fuego and Pacaya (Guatemala) volcanoes—produce high gas fluxes and infrequent violent strombolian or ‘paroxysmal’ eruptions that erupt very little magma. Here we draw on examples of open-vent volcanic systems to highlight the principal characteristics of their degassing regimes and develop a generic model to explain open-vent degassing in both high and low viscosity magmas and across a range of tectonic settings. Importantly, gas fluxes from open-vent volcanoes are far higher than can be supplied by erupting magma and independent migration of exsolved volatiles is integral to the dynamics of such systems. The composition of volcanic gases emitted from open-vent volcanoes is consistent with its derivation from magma stored over a range of crustal depths that in general requires contributions from both magma decompression (magma ascent and/or convection) and iso- and polybaric second boiling processes. Prolonged crystallisation of water-rich basalts in crustal reservoirs produces a segregated exsolved hydrous volatile phase that may flux through overlying shallow magma reservoirs, modulating heat flux and generating overpressure in the shallow conduit. Small fraction water-rich melts generated in the lower and mid-crust may play an important role in advecting volatiles to subvolcanic reservoirs. Excessive gas fluxes at the surface are linked to extensive intrusive magmatic activity and endogenous crustal growth, aided in many cases by extensional tectonics in the crust, which may control the longevity and activity of open-vent volcanoes. There is emerging abundant geophysical evidence for the existence of a segregated exsolved magmatic volatile phase in magma storage regions in the crust. Here we provide a conceptual picture of gas-dominated volcanoes driven by magmatic intrusion and degassing throughout the crust

Remote Characterization of Dominant Wavelengths From Surface Folding on Lava Flows Using Lidar and Discrete Fourier Transform Analyses

Surface folding is common in lava flows of all compositions and is believed to be due to changes in viscosity and flow velocity between the cooling crust and the more fluid flow interior. However, our understanding of the relationship between surface folding and flow rheology is incomplete. In this study we analyze digital terrain models of eight lava flows ranging in composition from basaltic andesite to rhyolite using a discrete Fourier transform analysis to quantitatively determine dominant surface fold wavelengths. Our discrete Fourier transform analyses show that each lava flow has multiple fold generations and that dominant wavelengths are more closely related to calculated effective viscosity than to lava composition. At our Oregon sites, average dominant wavelengths generally increase with viscosity (r2=0.68), and the correlation improves (r2=0.87) when expanded by including previously measured fold wavelengths and viscosities from the global database. However, there are a few exceptions to this positive trend where a few lava flows have lower or higher than expected dominant fold wavelengths, which we infer are due to secondary factors such as differences in eruption conditions (eruption rate, temperature, etc.). Additionally, over a 5 order of magnitude range in viscosity, there is significant overlap between the ranges of fold wavelengths, particularly from 10 to 20m, for lavas from basaltic andesite to rhyolite, making it difficult to determine a numeric correlation between surface folds and lava rheology that would allow remote characterization of lava

Political Risk and the Cost of Capital in Asia-Pacific Property Markets

This study investigates the impact of political risk on the cost of capital for publicly traded real estate firms. More specifically, by using a sample of 102 REITs and listed property trusts, which hold nearly 6,000 distinct investment properties across the Asia-Pacific region, we find strong empirical evidence that increased exposure to political risk increases both the cost of equity financing of a firm and its weighted average cost of capital. Interestingly, no such linkages are apparent between political risk and the cost of debt of a firm. These empirical results are robust to a variety of alternative measures of political risk, including a: 1) political rights index, 2) political change index, and 3) corruption perceptions index