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The risk involved in implementation of innovations in the real estate market

Author

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  • Marcin Sitek

    (Czestochowa University of Technology)

Abstract

Motivation: Innovativeness is considered in the literature as a key success driver that determines competitive advantage of enterprises in the market. However, this activity involves a substantial risk, which is often viewed as one of its major barriers. Nowadays, risk as an element inherent in any business activity is of key importance to enterprises that operate in market conditions and represent the problem that has not been taken into consideration very often. This was the motivation for the analysis of this problem. Moreover, motivation is a widespread aversion to risk among the participants of the real estate market, which, similarly to the necessity to incur substantial expenditures and the uncertainty of the final results connected with the implementation of innovations in the real estate market, represents one of the major barriers to adopt the risk. Aim: The aim of this study is to present risk factors in investment innovative operations in the real estate market. The study proposed the thesis that a specific level of development of the real estate market corresponds to a certain level of the market risk. Results: Based on the questionnaire survey of a local market in the context of feedback concerning the national market and the benefits of innovations and the involved risks, a brief outline of innovative activities in the real estate market was presented, with the involved risk and risk characterization. It was shown that a particularly large share of the risk of innovation activity on the real estate market is at risk for the market, which so far is not very sensitive in Poland and has a high degree of fluctuation of the operating conditions.

Suggested Citation

  • Marcin Sitek, 2018. "The risk involved in implementation of innovations in the real estate market," Ekonomia i Prawo, Uniwersytet Mikolaja Kopernika, vol. 17(2), pages 223-232, June.
    • Handle: RePEc:cpn:umkeip:v:17:y:2018:i:2:p:223-232
    DOI: 10.12775/EiP.2018.016
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    References listed on IDEAS

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    1. Peres, Renana & Muller, Eitan & Mahajan, Vijay, 2010. "Innovation diffusion and new product growth models: A critical review and research directions," International Journal of Research in Marketing, Elsevier, vol. 27(2), pages 91-106.
    2. Gary Pivo & Jeffrey D. Fisher, 2010. "Income, Value and Returns in Socially Responsible Office Properties," Journal of Real Estate Research, American Real Estate Society, vol. 32(3), pages 243-270.
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    Keywords

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    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development

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