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Article: Contestability of the urban land market: An event study of Hong Kong land auctions

TitleContestability of the urban land market: An event study of Hong Kong land auctions
Authors
KeywordsAuctions
Contestable markets
Economic profit
Event study
Urban land market
Issue Date2003
PublisherElsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/regec
Citation
Regional Science And Urban Economics, 2003, v. 33 n. 6, p. 695-720 How to Cite?
AbstractThe traditional theory of urban land markets assumes perfect contestability-the absolute freedom of market entry-that compels developers to bid up the land rent to equal the economic profit from land use. This assumption, however, is empirically untested due to the difficulties in measuring the ex ante economic profit of land acquisition. We overcome these difficulties by applying the event-study methodology to Hong Kong government land auctions. When a developer acquires a site at a price below its fair market value, the rationality of the stock market entails a positive abnormal return on the developer's stock. Our analysis shows evidence of positive expected abnormal returns, indicating an imperfectly contestable land market. We further show that the expected abnormal return increases with the site value and the government land disposal level but decreases with the property market liquidity. © 2003 Elsevier B.V. All rights reserved.
Persistent Identifierhttp://hdl.handle.net/10722/85578
ISSN
2015 Impact Factor: 1.024
2015 SCImago Journal Rankings: 1.328
ISI Accession Number ID
References

 

DC FieldValueLanguage
dc.contributor.authorChing, Sen_HK
dc.contributor.authorFu, Yen_HK
dc.date.accessioned2010-09-06T09:06:47Z-
dc.date.available2010-09-06T09:06:47Z-
dc.date.issued2003en_HK
dc.identifier.citationRegional Science And Urban Economics, 2003, v. 33 n. 6, p. 695-720en_HK
dc.identifier.issn0166-0462en_HK
dc.identifier.urihttp://hdl.handle.net/10722/85578-
dc.description.abstractThe traditional theory of urban land markets assumes perfect contestability-the absolute freedom of market entry-that compels developers to bid up the land rent to equal the economic profit from land use. This assumption, however, is empirically untested due to the difficulties in measuring the ex ante economic profit of land acquisition. We overcome these difficulties by applying the event-study methodology to Hong Kong government land auctions. When a developer acquires a site at a price below its fair market value, the rationality of the stock market entails a positive abnormal return on the developer's stock. Our analysis shows evidence of positive expected abnormal returns, indicating an imperfectly contestable land market. We further show that the expected abnormal return increases with the site value and the government land disposal level but decreases with the property market liquidity. © 2003 Elsevier B.V. All rights reserved.en_HK
dc.languageengen_HK
dc.publisherElsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/regecen_HK
dc.relation.ispartofRegional Science and Urban Economicsen_HK
dc.rightsRegional Science and Urban Economics. Copyright © Elsevier BV.en_HK
dc.subjectAuctionsen_HK
dc.subjectContestable marketsen_HK
dc.subjectEconomic profiten_HK
dc.subjectEvent studyen_HK
dc.subjectUrban land marketen_HK
dc.titleContestability of the urban land market: An event study of Hong Kong land auctionsen_HK
dc.typeArticleen_HK
dc.identifier.openurlhttp://library.hku.hk:4550/resserv?sid=HKU:IR&issn=0166-0462&volume=33&issue=6&spage=695&epage=720&date=2003&atitle=Contestability+of+the+Urban+Land+Market:+An+Event+Study+of+Hong+Kong+Land+Auctionsen_HK
dc.identifier.emailChing, S: steve.ching@hku.hken_HK
dc.identifier.authorityChing, S=rp01056en_HK
dc.description.naturelink_to_subscribed_fulltext-
dc.identifier.doi10.1016/S0166-0462(03)00005-Xen_HK
dc.identifier.scopuseid_2-s2.0-0141959769en_HK
dc.identifier.hkuros104395en_HK
dc.relation.referenceshttp://www.scopus.com/mlt/select.url?eid=2-s2.0-0141959769&selection=ref&src=s&origin=recordpageen_HK
dc.identifier.volume33en_HK
dc.identifier.issue6en_HK
dc.identifier.spage695en_HK
dc.identifier.epage720en_HK
dc.identifier.isiWOS:000185691700003-
dc.publisher.placeNetherlandsen_HK
dc.identifier.scopusauthoridChing, S=16411142700en_HK
dc.identifier.scopusauthoridFu, Y=7404433374en_HK

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