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Property Sector Financialization: The Case of Swiss Pension Funds (1992–2005)

Author

Listed:
  • Thierry Theurillat
  • José Corpataux
  • Olivier Crevoisier

    (Group of Research in Territorial Economy, University of Neuchâtel)

Abstract

Financialization is a major trend in Western economies. This paper shows, on the one hand, how it changes the management criteria and, on the other hand, the limits to financialization in the property sector. Between 1992 and 2004, about 15% of Swiss pension funds’ wealth was invested in property. As far as their investment policy is concerned, pension funds have two choices. First, they can directly own, and have management responsibility for, the properties in their portfolios. Alternatively, they can buy shares in mainly Zurich-based investment vehicles. In the first case, pension funds require staff with the relevant expertise along with the knowledge of property markets. Investments have a regional focus and are assessed internally by the funds. In the second case, pension funds are merely investors and investment appraisals and comparisons are made on the basis of market criteria such as yield, diversification in relation to risk and liquidity. In this case, property investments focus solely on the country’s main urban areas.

Suggested Citation

  • Thierry Theurillat & José Corpataux & Olivier Crevoisier, "undated". "Property Sector Financialization: The Case of Swiss Pension Funds (1992–2005)," GRET Journal Papers 02-10, GRET Group of Research in Territorial Economy, University of Neuchâtel.
    • Handle: RePEc:nct:journl:02-10
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    File URL: http://www.tandfonline.com/doi/pdf/10.1080/09654310903491507
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    Citations

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    Cited by:

    1. Zhongbo Jing & Shiyu Lu & Yang Zhao & Jun Zhou, 2023. "Economic policy uncertainty, corporate investment decisions and stock price crash risk: Evidence from China," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(S1), pages 1477-1502, April.
    2. Li, Chao & Ba, Shusong & Ma, Kejia & Xu, Yueling & Huang, Wenli & Huang, Niyuan, 2023. "ESG Rating Events, Financial Investment Behavior and Corporate Innovation," Economic Analysis and Policy, Elsevier, vol. 77(C), pages 372-387.
    3. Thierry Theurillat & Patrick Rérat & Olivier Crevoisier, 2015. "The real estate markets: Players, institutions and territories," Urban Studies, Urban Studies Journal Limited, vol. 52(8), pages 1414-1433, June.
    4. Qianwei Ying & Yanyan Zhu & Mengchao Yao & Ziyang Li, 2021. "Does stock market liberalisation restrain corporate financialisation?," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(5), pages 6263-6294, December.
    5. Zhi Dong & Tien Foo Sing, 2021. "Do Investors Overreact for Property and Financial Service Sectors?," Journal of Emerging Market Finance, Institute for Financial Management and Research, vol. 20(1), pages 79-123, April.
    6. Du, Pengcheng & Zheng, Yi & Wang, Shuxun, 2022. "The minimum wage and the financialization of firms: Evidence from China," China Economic Review, Elsevier, vol. 76(C).
    7. Huang, Bingbing & Cui, Yuying & Chan, Kam C., 2022. "Firm-level financialization: Contributing factors, sources, and economic consequences," International Review of Economics & Finance, Elsevier, vol. 80(C), pages 1153-1162.
    8. Muhammad Adil Rauf & Olaf Weber, 2021. "Urban infrastructure finance and its relationship to land markets, land development, and sustainability: a case study of the city of Islamabad, Pakistan," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(4), pages 5016-5034, April.
    9. Fang Yang & Xu Li, 2023. "Corporate Financialization, ESG Performance and Sustainability Development: Evidence from Chinese-Listed Companies," Sustainability, MDPI, vol. 15(4), pages 1-28, February.
    10. Hanying Qi, 2019. "A New Literature Review on Financialization," Journal of Accounting, Business and Finance Research, Scientific Publishing Institute, vol. 7(2), pages 40-50.
    11. Zeng, Xiaoming & Chen, Hao & Yin, Yanzhao & Liu, Youjin, 2024. "CEOs’ financial work experience and firms’ outbound investments," Journal of Multinational Financial Management, Elsevier, vol. 74(C).
    12. Li, Xiao-Lin & Qiu, Guojing & Ding, Hui, 2022. "The impact of exchange rate policy uncertainty shock on Chinese energy firms' risk-taking," Energy Economics, Elsevier, vol. 105(C).

    More about this item

    Keywords

    Finance Industry; Territorial Economy; Swiss Pension Funds;
    All these keywords.

    JEL classification:

    • G0 - Financial Economics - - General
    • G3 - Financial Economics - - Corporate Finance and Governance
    • L0 - Industrial Organization - - General
    • E0 - Macroeconomics and Monetary Economics - - General
    • A1 - General Economics and Teaching - - General Economics
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics

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