IDEAS home Printed from https://ideas.repec.org/a/eee/lauspo/v77y2018icp752-759.html
   My bibliography  Save this article

Estimating the land opportunism of hotel investment in generating real estate appreciation and firms’ market value

Author

Listed:
  • Wang, Caiping
  • Dai, Shanshan
  • Xu, Honggang

Abstract

The scarcity of well-located land is becoming an important concern for business operations around the world. This study sheds lights on the mechanisms of land speculation by explaining how Chinese businesses’ investment in hotels leads to real estate appreciation and firms’ market value increase. This study proposes that hotel investment not only has the potential to increase firm value through the hotels’ operational revenues; land opportunism may also lead to real estate appreciation and associated increases in market value. The study investigates the effect of land opportunism in the Chinese hotel investment context. Publicly listed companies that invest into hotel businesses to diversify their business were selected as the main sample. The findings show that hotel investment improves Chinese firms’ value. Specifically, hotel investment increases these firms’ real estate value and the hotel real estate appreciation drives the increases in the companies’ value in the securities market. This mode of hotel investment is promoted by both local governments and hotel developers. It is possibly harmful to the hotel sector’s sustainable development; thus, strict regulations may be needed to manage the land use policies.

Suggested Citation

  • Wang, Caiping & Dai, Shanshan & Xu, Honggang, 2018. "Estimating the land opportunism of hotel investment in generating real estate appreciation and firms’ market value," Land Use Policy, Elsevier, vol. 77(C), pages 752-759.
    • Handle: RePEc:eee:lauspo:v:77:y:2018:i:c:p:752-759
    DOI: 10.1016/j.landusepol.2018.06.015
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0264837718303909
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.landusepol.2018.06.015?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Fabrizio Barca & Philip McCann & Andrés Rodríguez‐Pose, 2012. "The Case For Regional Development Intervention: Place‐Based Versus Place‐Neutral Approaches," Journal of Regional Science, Wiley Blackwell, vol. 52(1), pages 134-152, February.
    2. Gönül Çolak, 2010. "Diversification, Refocusing and Firm Value," European Financial Management, European Financial Management Association, vol. 16(3), pages 422-448, June.
    3. Ye, Dezhu & Liu, Shasha & Kong, Dongmin, 2013. "Do efforts on energy saving enhance firm values? Evidence from China's stock market," Energy Economics, Elsevier, vol. 40(C), pages 360-369.
    4. Du, Jinfeng & Peiser, Richard B., 2014. "Land supply, pricing and local governments' land hoarding in China," Regional Science and Urban Economics, Elsevier, vol. 48(C), pages 180-189.
    5. Wu, Jing & Gyourko, Joseph & Deng, Yongheng, 2012. "Evaluating conditions in major Chinese housing markets," Regional Science and Urban Economics, Elsevier, vol. 42(3), pages 531-543.
    6. White, Halbert, 1980. "Using Least Squares to Approximate Unknown Regression Functions," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 21(1), pages 149-170, February.
    7. Yang, Zhenshan & Cai, Jianming, 2016. "Do regional factors matter? Determinants of hotel industry performance in China," Tourism Management, Elsevier, vol. 52(C), pages 242-253.
    8. Park, Sungbeen & Song, Sujin & Lee, Seoki, 2017. "Corporate social responsibility and systematic risk of restaurant firms: The moderating role of geographical diversification," Tourism Management, Elsevier, vol. 59(C), pages 610-620.
    9. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, December.
    10. Justin Tan & Yuejun Tang, 2016. "Donate Money, but Whose? An Empirical Study of Ultimate Control Rights, Agency Problems, and Corporate Philanthropy in China," Journal of Business Ethics, Springer, vol. 134(4), pages 593-610, April.
    11. United Nations UN, 2015. "Transforming our World: the 2030 Agenda for Sustainable Development," Working Papers id:7559, eSocialSciences.
    12. James H. Stock & Jonathan Wright, 2000. "GMM with Weak Identification," Econometrica, Econometric Society, vol. 68(5), pages 1055-1096, September.
    13. Lin, Chen & Su, Dongwei, 2008. "Industrial diversification, partial privatization and firm valuation: Evidence from publicly listed firms in China," Journal of Corporate Finance, Elsevier, vol. 14(4), pages 405-417, September.
    14. Wang, Caiping & Xu, Honggang, 2011. "Government intervention in investment by Chinese listed companies that have diversified into tourism," Tourism Management, Elsevier, vol. 32(6), pages 1371-1380.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jaromir Vrbka & Tomas Krulicky & Tomas Brabenec & Jan Hejda, 2020. "Determining the Increase in a Building’s Appreciation Rate Due to a Reconstruction," Sustainability, MDPI, vol. 12(18), pages 1-13, September.
    2. Shanshan Dai & Honggang Xu & Fangfang Chen, 2019. "A Hierarchical Measurement Model of Perceived Resilience of Urban Tourism Destination," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 145(2), pages 777-804, September.
    3. Xiaojie Wang & Yi Duan & Pengcheng Liu & Guixin Han, 2020. "The Influence of Housing Investment on Urban Innovation: An Empirical Analysis Based on City-Level Panel Data in China," Sustainability, MDPI, vol. 12(7), pages 1-15, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Borisova, Ginka & Fotak, Veljko & Holland, Kateryna & Megginson, William L., 2015. "Government ownership and the cost of debt: Evidence from government investments in publicly traded firms," Journal of Financial Economics, Elsevier, vol. 118(1), pages 168-191.
    2. Giampiero Marra & Matteo Fasiolo & Rosalba Radice & Rainer Winkelmann, 2023. "A flexible copula regression model with Bernoulli and Tweedie margins for estimating the effect of spending on mental health," Health Economics, John Wiley & Sons, Ltd., vol. 32(6), pages 1305-1322, June.
    3. Elena Grimaccia & Alessia Naccarato, 2022. "Food Insecurity in Europe: A Gender Perspective," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 161(2), pages 649-667, June.
    4. Boateng, Elliot & Agbola, Frank W. & Mahmood, Amir, 2021. "Foreign aid volatility and economic growth in Sub-Saharan Africa: Does institutional quality matter?," Economic Modelling, Elsevier, vol. 96(C), pages 111-127.
    5. Martey, Edward & Etwire, Prince M. & Atinga, David, 2021. "To attend or not to attend: Examining the relationship between food hardship, school attendance and education expenditure," International Journal of Educational Development, Elsevier, vol. 80(C).
    6. Castells-Quintana, David, 2017. "Malthus living in a slum: Urban concentration, infrastructure and economic growth," Journal of Urban Economics, Elsevier, vol. 98(C), pages 158-173.
    7. Byungki Kim & Jinhan Pae & Choong-Yuel Yoo, 2019. "Business Groups and Tunneling: Evidence from Corporate Charitable Contributions by Korean Companies," Journal of Business Ethics, Springer, vol. 154(3), pages 643-666, February.
    8. Min Jiang & Liangjie Xin & Xiubin Li & Minghong Tan, 2016. "Spatiotemporal Variation of China’s State-Owned Construction Land Supply from 2003 to 2014," Sustainability, MDPI, vol. 8(11), pages 1-16, November.
    9. Daisy J. Huang & Charles Ka Yui Leung & Chung-Yi Tse, 2018. "What Accounts for the Differences in Rent-Price Ratio and Turnover Rate? A Search-and-Matching Approach," The Journal of Real Estate Finance and Economics, Springer, vol. 57(3), pages 431-475, October.
    10. Xi, Qiangmin & Mei, Lin, 2022. "How did development zones affect China’s land transfers? The scale, marketization, and resource allocation effect," Land Use Policy, Elsevier, vol. 119(C).
    11. Guofang Huang & Haiyan Liu, 2021. "Estimating expectations-based reference-price effects in the used-car retail market," Quantitative Marketing and Economics (QME), Springer, vol. 19(3), pages 457-503, December.
    12. Leopoldo Gutierrez & Ivan Montiel & Jordi A. Surroca & Josep A. Tribo, 2022. "Rainbow Wash or Rainbow Revolution? Dynamic Stakeholder Engagement for SDG-Driven Responsible Innovation," Journal of Business Ethics, Springer, vol. 180(4), pages 1113-1136, November.
    13. Brox, Enzo & Krieger, Tommy, 2019. "Birthplace diversity and team performance," ZEW Discussion Papers 19-020, ZEW - Leibniz Centre for European Economic Research.
    14. Duc Nam Phung & Anil V. Mishra, 2016. "Corporation Diversification and Firm Performance: Evidence from Vietnamese Listed Firms," Australian Economic Papers, Wiley Blackwell, vol. 55(4), pages 386-408, December.
    15. Marcelo Moreira & Geert Ridder, 2019. "Efficiency loss of asymptotically efficient tests in an instrumental variables regression," CeMMAP working papers CWP03/19, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
    16. Deininger, Klaus & Jin, Songqing & Liu, Shouying & Xia, Fang, 2015. "Household-level impacts of property rights reform in peri-urban China: Evidence from the Chengdu National Experiment," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205753, Agricultural and Applied Economics Association.
    17. George E. Halkos & Apostolos S. Tsirivis, 2023. "Electricity Production and Sustainable Development: The Role of Renewable Energy Sources and Specific Socioeconomic Factors," Energies, MDPI, vol. 16(2), pages 1-21, January.
    18. David T. Frazier & Eric Renault & Lina Zhang & Xueyan Zhao, 2020. "Weak Identification in Discrete Choice Models," Papers 2011.06753, arXiv.org, revised Jan 2021.
    19. Dorothee Bühler & Rebecca Hartje & Ulrike Grote, 2018. "Matching food security and malnutrition indicators: evidence from Southeast Asia," Agricultural Economics, International Association of Agricultural Economists, vol. 49(4), pages 481-495, July.
    20. Jinlin Liu & Karen Eggleston, 2022. "The Association between Health Workforce and Health Outcomes: A Cross-Country Econometric Study," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 163(2), pages 609-632, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:lauspo:v:77:y:2018:i:c:p:752-759. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joice Jiang (email available below). General contact details of provider: https://www.journals.elsevier.com/land-use-policy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.