European Business School London

About: European Business School London is a based out in . It is known for research contribution in the topics: Real estate investment trust & Empirical research. The organization has 323 authors who have published 636 publications receiving 17446 citations. The organization is also known as: EBS London.

The Profitability Premium in Real Estate Investment Trusts

Abstract: Traditionally, we have assessed firm success relative to a two factor model using say size and a book-to-market ratio. However, recently Novy-Marx (2013) suggests that these measures may simple be a proxy for profitability in firms. The argument is that traditional profitability measures can be manipulated by management and thus cloud the relationship between measured profits and firm success. However, a cleaner measure of profitability better predicts performance than does size and book-to-market. Thus, the traditional empirical factors are replaced with a stronger theoretically predictive variable. Also, in that context at least for REITs, size and book-to-market lose their explanatory power.

Spurious Dynamic Conditional Correlation

Abstract: Autoregressive-type multivariate GARCH (MGARCH) models have been widely adopted by scholars to measure time-varying correlation structures. It is a well-known stylized fact that conditional correlations generated by these models tend to exhibit a highly unstable and erratic behavior under certain conditions. Therefore, the value added of these scientifically demanding MGARCH techniques remains sometimes ambiguous. In this paper, we provide a measure for the autocovariance structure of conditional correlations generated by a DCC MGARCH under the assumption that true conditional correlations are constant. This allows us to formally demonstrate that autocovariances of conditional correlations generated by an autoregressive-type MGARCH model are highly sensitive to small changes in model parameters. We provide empirical evidence for the impact of parameter changes on forecasting accuracy and show under which conditions a simple rolling window estimator yields superior results.

Fine-tuning a corporate hedging portfolio: The case of an airline.

Abstract: Industrial companies typically face a multitude of risks that could cause significant fluctuations in their cash flow. This is a case study of the hedging strategy adopted by an international air carrier to manage its jet-fuel price exposure. The airline's hedging approach uses 'strips' of monthly collars constructed with Asian options whose payoffs are based on average of 'within-prompt-month' oil prices. Using the carrier's own implicit objective function based on an annual granularity, the authors show how the air carrier could fine-tune its current hedge portfolio by adding tailored exotic options. The article describes annual average-price options, provides an explicit valuation of them, and considers how such instruments may affect corporate liquidity. Consistent with its annual objective function, the airline made this exotic derivative the central tool to hedge across all potential realized values of annual jet-fuel spot prices. The authors believe this modified portfolio is better suited to address the firm's hedging cost and its overall exposure to jet-fuel price fluctuations. [ABSTRACT FROM AUTHOR]

Determinants of M&A Success in the Pharmaceutical and Biotechnological Industry

Abstract: The pharma and biotech industry has faced major challenges in the previous years with respect to both the revenues and costs which led to a merger wave in this particular sector. Using standard event study methodology, this paper analyzes the success of the worldwide M&A (Mergers and Acquisitions) transactions in the pharma and biotech industry between 1996 and 2006. Overall, the combined entities show insignificant announcement effects, targets benefit from highly positive abnormal returns, whereas acquirers reduce their shareholder value. With regard to specific success factors, we find a strong evidence that focus on sales synergies is valued by the stock markets as a key success strategy for pharma and biotech M&A. Consequently, traditional pharma companies that still dispose of sufficient cash from their existing sales but face a dried-out product and patent pipeline should acquire innovative, but cash-poor biotech firms. The level of cost efficiency does not have a statistically significant impact on the abnormal returns. We interpret this finding as an indicator that the stock markets do not believe in cost synergies as a motivation for a successful transaction in the pharma and biotech industry.

Knowledge Transfer in IS Offshoring: Processes, Roles, and Success Factors

Abstract: IS offshoring research regarding knowledge transfer processes, roles involved, as well as influencing factors is characterized by its diverse and heterogeneous nature. Covering the last fifteen years of IS offshoring research, this paper provides a consolidated view of the field of study. It presents a generic knowledge transfer process consisting of four stages and five milestones. These stages are characterized and evaluated according to their relevance for knowledge transfer, the types of knowledge transferred, the main activities and methods for transfer and testing, as well as the goals pursued. Furthermore, we aggregate the diverse literature findings relating to individuals who facilitate knowledge transfer processes into a general role. We label this role “offshore coordinator” and present its core tasks and necessary skills. In addition, we identify and cluster core factors that influence success or failure of knowledge transfer. In summary, our study answers calls to discontinue with empirically derived definitions in favor of theory-based conceptualization of the IS offshoring research field with respect to knowledge transfer processes, roles, and success factors. Future studies can build on these results and examine questions with respect to particular characteristics of knowledge transfer processes and their influencing success and failure factors.