December, 2019
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October, 2017




Principal Investigator: Wilson W.S. LU
Funding body: GRF


Corporate social responsibility (CSR) has gradually become the Quadruple Bottom Line in business. To provide the legitimacy of CSR, researchers have endeavored to find a link between CSR and corporate financial performance (CFP). This study offers and tests a “paradoxical link” between CSR and CFP—CSR may be detrimental to financial performance in the short term (e.g. by reducing carbon emission, or taking account of fair trade) but will be conducive to improving performance in the long term (e.g. by developing reputation, or improving business relationships). Drawing on CSR theories, this study will develop an empirically plausible model to reflect the paradoxical CSR-CFP link. A large set of longitudinal panel data of international construction companies (ICCs) will be derived from various sources including Engineering-News Record, Fortune, and annual reports of ICCs along with their CSR disclosures. Cross-sectional regression and lagged analyses will be conducted to test the hypothesis. The research project will have profound academic and practical values. Academically, the research may provide fresh answers to the moot question regarding the CSR-CFP link. Practically, it will help explain some CSR dilemmas, such as executives’ hesitation to fully engage in CSR despite the rhetorical exhortations of its benefits.


  1. To model the paradoxical link between Corporate Social Responsibility (CSR) and Corporate Financial Performance (CFP);
  2. To empirically test the CSR-CFP model by putting it into the rich context of international construction business;
  3. To identify a set of business cases that can help interpret the CSR-CFP link by using international construction companies (ICCs) as case studies.


  1. Explore the key trends in CSR reporting by top international construction companies, with a view to examining its convergence to reporting guidance such as the Global Reporting Initiative (GRI);
  2. Empirically test the revert U relationship between Corporate Social Performance (CSP) and Corporate Financial Performance (CFP);
  3. Empirically test the paradoxically relationship between Corporate Social Performance (CSP) and Corporate Financial Performance (CFP).

Selected peer-reviewed journal papers


Principal Investigator: Lawrence W.C. LAI (PI), K.W. CHAU (Co-PI)
Funding body: PPR


Have there been any true concessions in the government land conversion process that have favoured franchised bus operators? Through an examination of the conditions of the franchises and the terms of the relevant land leases, this study tries to verify or debunk the claim that there has been government favoritism to business monopolies.


  1. Find out if the terms of the Crown (Government) Leases, post-1933 conditions of the franchises, Conditions of Modifications/ Surrender and Re-grant for KMB and CMB’s garages, depots, and workshops provide specific concessions regarding land acquisitions for subsequent modifications to favour other uses.
  2. Evaluate the environmental gains/losses of converting bus depots into non-depot uses and their relocation to other places.
  3. Evaluate if there is any evidence of gain/loss in operational efficiency upon the relocation of the depots from their original to their replacement sites.
  4. Evaluate the credibility of land administration practices for changing the use of old bus depots and make recommendations for reforms when they are deemed useful.



Conclusion and Policy Impact

Principal Investigator: Lawrence W.C. LAI (PI), Daniel C.W. HO (Co-PI),  K.W. CHAU (Co-PI)
Funding body: PPR-CPU


Is the apparently long and complicated development process of residential units under Comprehensive Development Area (CDA) zoning due to a failure to obtain Town Planning Board (TPB) approvals? Or is it the developers’ strategy of hoarding land for the better timing of the sale of property units? Or is it to improve building design?


  1. Find out the number of planning applications and amount of time involved for each CDA project before they started construction from the date of the first valid planning application made.
  2. Find out if the developer’s amendments to the planning proposals involved innovative responses to departmental comments for each CDA project to start construction from the date of the first valid planning application.
  3. Find out if the time taken by a developer to get final planning permission to commence construction for each CDA project with the first valid planning application was due to business innovation to cater to sustainable development or strategic behaviour.


Publicly available TPB data, property transaction, Master Layout Plan (MLP) from the Planning Department were used to test various refutable empirical hypotheses.

Study Coverage: 01-1-1990 -31-10-2015
CDA projects: 380 (~200,000 units)

Residential CDA built and occupied: 65
(~100,000 units or around 50% of approved total)


Land Summary:

a. Total area of all CDA sites for all years 724 ha
b. Total area of 65 developed CDA sites 278 ha
c. Undeveloped and potential residential area 446 ha (a – b)

The approximate housing capacity of undeveloped CDA sites is around 450,000 persons.


No direct evidence of deliberate delays or hoarding were found. Difficulties in land assembly and uncertainty of the property markets are the usual reasons given by practitioners we consulted as the most decisive factors in the lengthy process of development.

Policy Recommendations

Principal Investigator: K.W. CHAU (PI), S.K. WONG (Co-I)
Funding body: GRF


This study investigates how public-sector-led urban renewal projects affect the prices of housing units in the vicinity of the urban renewal project.

Besides the well-known positive external effect of urban renewal, this project also aims at examining its potential negative impact on nearby older buildings. We conjecture that, other things being equal, the prices of nearby older buildings that are not included in the public-sector-led redevelopment project are likely to be lowered. This is because a significant portion of the market value of an aged building is derived from its real option to redevelop. This value will decline if the building has not been included in a nearby public-sector-led urban renewal project. This study uses empirical data from Hong Kong to test the positive and negative impacts of these urban renewal projects on the prices of nearby housing units.


  1. To investigate the positive impact of urban renewal projects on prices of nearby housing units.
  2. To review theory related to modeling a property’s real option value of redevelopment.
  3. To apply the theory reviewed in (2) to analyze the potential negative impact of urban redevelopment projects on prices of nearby housing units.
  4. To construct a dataset for testing the positive and negative impact of urban redevelopment projects on nearby housing price.
  5. To carry out empirical tests on the positive and negative impact of urban redevelopment projects on nearby housing price.
  6. To test how redevelopment real option affects the formation of housing prices in a high density urban area.

Experimental Work

The following model is estimated using transaction records of units within 200m of completed URA projects:

ln(RPt) = β0 + β1ln(AGE) + β2ln(GFA) + β3ln(FL) + β4T + β5T·COM + β6T·SA + β7T·ln(AGE) + β8ln( AGE) ·DD + εt


RPt = transaction price of a property in the vicinity of a redeveloped site, which is obtained by deflating the nominal transaction price by the relevant HKU-REIS price index at time t; AGE = the age of the property in years;
GFA = Gross Floor Area of the property in m2; FL= floor level of the property; T = dummy variable equals to 1 after the announcement of a redevelopment project and 0 otherwise; COM = commercial floor areas (in thousands of m2) of the redevelopment project; SA = areas of redevelopment site; DD = distance between the redevelopment project and the nearby building
βi= coefficients to be estimated; and ε = error term


Real housing prices decrease with building age [ln(AGE)], but increase with the flat size [ln(GFA)] and floor level [ln(FL)]. The announcement of an urban renewal project (T) has an overall positive impact on nearby property prices. The positive impact increases with size of the URA project [T.SA] and the size of the commercial elements in the project [T.COM]. The urban renewal has a negative impact on redevelopment option value of nearby housing units [T.ln(AGE)] and the effect diminishes as the distance from the URA project increases [T*ln(AGE)*DD].

Principal Investigator: L.H. LI (PI), S.K. WONG (Co-PI)
Funding body: PPR


Property prices have since the SARS attack in 2003 risen to a record high level in 2012 in Hong Kong . This unprecedented and sustained increase of housing price is attributable to a lot of factors, among them the allegation of “high land price policy” adopted by the government. Despite the political controversies behind this allegation, it is a fact that land supply in Hong Kong is limited and that impacts on the housing production in the city. However, for a long term and sustainable urban land policy to be formulated, it is imperative to establish the causal relationship between the land supply mechanism and the overall housing market performance (in terms of price movements and housing supply) first. This project looks at this causal relationship since 1980 by means of a Granger Causality model . We need to understand how land supply by the government via the public land sale programmes affects general housing prices, as well as specific sub-sector in the housing market, in terms of magnitude and time lag effect. Since the government has direct control over government land sale, this examination allows the authority to estimate their land supply policy on impact of market housing price level more effectively.


  1. This proposal examines the relationship between the overall land supply mechanism and the housing market. The examination concentrates on the correlation between land supply from government and housing price.
  2. The project intends to establish the causality correlation between land supply from government channel and housing price changes.
  3. This project intends to propose urban land policies that can deal with housing supply and affordable housing issues.


In this project, we use housing units completed on land supplied via government land sale programme as a proxy for land supply. Our dataset consists of the new residential housing supply estimated from the Government land sale and the private housing prices in Hong Kong. The dataset runs from the first quarter (Q1)1987 to the last quarter (Q4) of 2012. Land sale refers to the sale of land to developers from the government for residential development.

Over the 25-year period, the new housing supply generated from government land sale did not Granger-cause housing prices or vice versa in Hong Kong. Our results of an insignificant relationship between new housing supply and housing prices for the entire sample period from 1987 to 2012 is in line with our hypothesis that Government land sales comprise only a small portion of the housing stock.

On the other hand, a significant unidirectional causality result from housing prices to new housing supply is identified in subsample time periods, in particular after the Application List system was formally adopted and fully operational as the official channel for selling land in Hong Kong.


Hence, ceteris paribus whilst the supply of new land sites via the Government land sale programme are more responsive to housing price movements subsequent to the implementation of Application List due to the demand-oriented nature of the system which induces developers to apply for more land when housing prices are increasing. We find that higher housing price does Granger-cause an increase in housing units supplied from government land sale programme during that period.

The analyses of the correlation provide government with adequate empirical data support to streamline different sources of land supply directly or indirectly controlled by the authority. Urban land policy priority can then be formulated so that sustainable land development can be achieved.


Prof K W Chau, Chair Professor, REC
Dr Lennon Choy, Associate Professor, REC

HKU Members:

Prof Chris Webster, Dean, FoA

Prof Daniel Ho, Honorary Professor
Prof Lawrence Lai, Professor
Mr H F Leung, Professor of Practice
Dr L H Li, Associate Professor
Dr Frank Lorne, Honorary Professor
Prof Wilson Lu, Associate Professor
Dr F F Ng, Associate Professor
Dr K C Wong, Associate Professor (Teaching)
Prof Kelvin Wong, Professor
Dr Ho Yin Lee, Associate Professor

Prof Shenjing He, Professor

Faculty of Business and Economics:
Prof Chenggang Xu, Professor

Faculty of Law:
Prof Say Goo, Professor

Non-HKU Members:

Prof Lee Benham
– Ronald Coase Institute and Department of Economics, Washington University in St. Louis.
Dr Richard Sandor
– Environmental Financial Products LLC and University of Chicago Law School.
Prof Frank Lorne
School of Management, New York Institute of Technology.
Dr Ning Wang
– Ronald Coase Institute.
Dr Edward Yiu
– Chinese University of Hong Kong
Dr Rita Lee
– Hong Kong Shue Yan University
Prof Daniel Ho
– Technological and Higher Education Institute of Hong Kong


Wai Hong Chan
Ka Shing Cheung
Mark Hansley Yang Chua
Xiangrui Gong
Yaoxuan Huang
Yang Ji
Ling  Li
Ye  Li
Jingjing Ruan
Zhuoxiao Sun
Tianwei Yang