Value Capture Mechanisms Research Articles

Neoliberal urban segregation and property tax: A critical view of Santiago, Chile

Urban property taxes are primordial land value capture mechanisms that can potentially redistribute public income to underprivileged areas in a city. However, in Santiago, Chile, a city with considerable socio-spatial segregation correlated with significant disparities in municipal budgets, social welfare, and intergenerational reproduction of wealth, the property tax system is weak to address this issue effectively. This study analyses the potential redistributive capacity of property taxes in Greater Santiago, comparing the evolution of real estate surplus values with municipal budgets. These results show that a 2% increase in property taxes would suffice to equalize per capita municipal budgets, essential to redistribute social welfare. In Chiles’s neoliberal planning framework, we argue that weak property taxes are critical for the intergenerational reproduction of wealth and poverty in different municipalities. Property as capital is efficient for capturing unearned value in the long term and obtaining rental income, two mechanisms of inequality reproduction, as property accumulation is only feasible if it is not progressively taxed. In sum, this analysis of property taxes in Santiago contributes to the theoretical understanding of passive mechanisms of inequality reproduction in a neoliberal system and empirical support for a progressive increase of property taxes.

A blueprint for success? Exploring business models of additive manufacturing ventures

Additive Manufacturing (AM) was expected to be the next great technological revolution, yet the predicted market growth has fallen short by 40%. Using a proprietary, cross-sectional data set of 350 ventures in the AM field founded between 2000 and 2017, this study analyses AM companies from a business model perspective. Specifically, we explore which value delivery and value capture mechanisms are decisive for AM venture success, measured via their operational and ownership state. We reveal that targeting the B2B market and selling via partner networks significantly increases firm survival likelihood. Further, applying a recurring revenue model increases the likelihood of an IPO. Our main contributions are two-fold: first, our research complements the business model literature by evaluating value delivery and capture in the AM entrepreneurial space, revealing that customer segments, sales channels, and revenue models are key to venture success. Second, we provide business model design guidelines to entrepreneurs as well venture capitalists in the AM field.

The rapacious ambivalence of VC investment: Venture capital, value capture, and the valorization of crisis

Abstract This article explores venture capital (VC) as a means and process of accumulating future social necessity. It explores the mechanisms of growth that make VC-backed firms distinct. I argue that a distinctive feature of surplus value capture through VC is valorization via socially necessary contracted space-time, a corrective to Marx’s theorization of socially necessary labor time, which appears incomplete in the context of VC. First, extending Marx’s general formula for capital, I develop a general formula for VC, demonstrating how the VC investment upends traditional theories of capitalist accumulation. Second, I argue that VC invests in firms seeking to capture ‘human capital’ resources and uncapitalized market ‘space’ (noncapitalist social logics of exchange) with the aim of achieving ‘product-market fit’. Third, I demonstrate how time and space are contracted under the VC process as a value capture (VC) mechanism relating to future social necessity. VC is, I argue, about accumulating today what we will all need to be consuming tomorrow, just to keep up with social norms. Finally, I explore how the valorization of crisis (VC) demonstrates the accumulation of future social necessity in practice. I conclude with thoughts concerning the possibility of alternatives beyond the overdetermined rapacity of ‘VC’.

Dilemmas of 21st century land value capture: Examining Henry George’s legacy in a new Gilded Age

This essay reviews 20th century applications of Henry George’s thought by local and national policy makers in the Anglo-American context with the goal of better interpreting contemporary debates about land value capture (LVC). Proponents of LVC mechanisms argue that incentive zoning, planning obligations/exactions, special assessments, transfers of development rights, density bonusing, and tax increment financing can rebalance public and private wealth and promote economically redistributive development where direct government spending on social goods is not politically possible. Critical scholars question this stance, arguing that interventions pursued under the LVC banner often deliver publicly generated wealth to already-affluent parties while contributing to price escalation that harms low-income and middle-class citizens. An examination of Henry George’s foundational ideas sheds light on the challenges policy makers have faced in attempting to recover the “unearned increment” for the public. This analysis provides useful context for present-day debates about the advisability and practical effects of land value capture mechanisms.

New metro and housing price and rent premiums: A natural experiment in China

Causal evidence of housing premiums of new metro lines is indispensable for financing and governing infrastructure investments. Previous studies have investigated the housing effects of urban rail transit with varying methods, while causality remains unsettled. This study used a natural experiment to estimate the causal effects of the new metro interventions on housing premiums in Shenzhen, China. We used metro planning knowledge, reasoning on pursuits in land finance and engineering efficiency to verify the as-if randomness of the treatment–control group assignment in the natural experiment to reinforce the power of causal inference. We applied hedonic difference-in-difference (DID) models to estimate the average treatment effects based on the longitudinal housing price and rent data. We found that housing rents increased significantly and consistently after the metro entered operation, but the price premium varied. In addition, the rent premiums around new metro lines showed a price gradient over the distance to stations. Our findings provide scientific evidence for designing value capture mechanisms (e.g. value-added property tax and rent revenue) to recover metro investment costs in China.

Alpha territorialisation in Milan: Framing a research agenda

Within the special issue, this paper aims to contribute to the debate on VIP urbanism in specific relation to phenomena of alpha territorialisation. Accordingly, it tries to apply this international figure to long-term analyses of the Milan case study, which can be considered an original intersection between the articulation of urbanisation and socio-spatial polarisation processes in the Italian national context and the dynamics of global cities, integrating international trends with site-specific characteristics. On this background and in relation to a comparison with the London case study, the article retraces the recent evolution of spatial processes, policy and planning in the Milan urban core: on the one hand, by recognising different local strategies, phases and possible meanings of phenomena of alpha territorialisation; on the other hand, by identifying open challenges for further research, policy making and planning. Two issues seem worth to be underlined and further explored: both the characteristics and spatial effects of super-rich in Milan, and the opportunities for value-capture mechanisms to work.

Metaverse technologies in product management, branding and communications: virtual and augmented reality, artificial intelligence, non-fungible tokens and brain-computer interface

PurposeTo examine the effects of the metaverse on firms’ marketing activities.Design/methodology/approachA conceptual paper.FindingsIt provides evidence of the growing importance of different value capture mechanisms in the metaverse.Originality/valueAmong the first articles on this topic.

Location of transit-oriented development stations based on multimodal network equilibrium: Bi-level programming and paradoxes

The unique relationship between the value capture mechanism (VCM) and transit-oriented development (TOD) stations and their peripheral areas, which progressively develops an expanded multimodal network, is well acknowledged in the transport industry. However, in regards to the location of TOD stations, insufficient attention has been paid to user travel behaviours and the operating mechanism of the multimodal network. To bridge this research gap, we develop a bi-level programming model for the location of TOD stations that analyses user travel behaviour in the multimodal network. The VCM and transit priority are the objectives of the upper level of this multi-objective optimization model. And the lower level of the model is a modified multimodal network equilibrium based on the Davidson function. Using a simple numerical simulation, this study proposes explanations for some traffic paradoxes from the perspective of a multimodal network equilibrium. We also illustrate competition and collaboration between rail and bus transport systems. Finally, this study uses an empirical case to describe the feasibility and applicability of the model. The results demonstrate that the location of TOD stations is not only one of the keys to the competitiveness of public transport but is also relevant to implementing its VCM.

Impact of Land Value Tax on the Equity of Planning Outcomes

The question of land ownership is fundamental to any modern society and has been blamed as the root of numerous social inequalities. This paper explores one potential solution to the land question, Land Value Tax (LVT), which was first popularised in the 1880s by Henry George. Despite its long history, LVT has not been widely implemented, but recently proposals to replace existing property taxes with this form of taxation have re-emerged on the political scene. While the Welsh Government has recently explored the idea of introducing an LVT, there are limited studies on this form of taxation in the context of a discretionary planning system, such as the Welsh planning system. This paper conducts exploratory qualitative research using Wales as a case study. Data was collected via semi-structured interviews with experts across various related fields, primarily within taxation and planning, to establish the potential effects of LVT in practice, with a particular focus on how it might affect the equity of planning outcomes. Overall, the research showed that despite the strong theoretical potential, fundamental practical issues would diminish the ability of LVT to effectively influence planning. LVT is argued to be largely incompatible with a discretionary planning system (e.g., the Welsh planning system), and therefore, the research concluded that many of the potential benefits of LVT could be better achieved through reforms to existing taxes and planning processes, particularly land value capture mechanisms.

Patent remedies and technology licensing: Evidence from a supreme court decision

AbstractResearch SummaryRemedies for infringement are important determinants of the strength of patent protection. However, there has been little emphasis on the role of patent remedies in profiting from innovation via licensing. To address this gap, we examined the impact of patent remedies on technology licensing. Our study exploited a US Supreme Court decision that reduced the probability of issuing injunctions as a remedy to compare US firms' licensing propensity with that of a matched control group of European firms. We found that the decision reduced, on average, US firms' propensity to license. This effect is driven mainly by small firms and especially those in discrete technology industries. This research contributes to the literature on profiting from innovation and presents several implications for firms' licensing strategies.Managerial SummaryThis study demonstrates how patent remedies (i.e., injunctions vs. ongoing royalties) differentially influence firms' incentives to engage in technology licensing. We suggest that injunctions cast a credible threat to potential licensees' product market activities, enhance the bargaining power of licensors in negotiations, and increase the likelihood of making a deal. Our research shows that when the probability of obtaining an injunction declines, firms are less likely to capture value by out‐licensing their technological innovations. Especially for small firms, profiting from innovation via licensing becomes challenging. This effect exacerbates when small firms operate in discrete technology industries. These findings imply that in such conditions, firms may benefit from other value capture mechanisms, such as entering the product market or forming partnerships with industry incumbents.

Innovating agri-food business models after the Covid-19 pandemic: The impact of digital technologies on the value creation and value capture mechanisms

This paper investigates the phenomenon of business models innovation (BMI) empowered by digital technologies and activated as a response to Covid-19 crisis. In fact, during the crisis numerous digital redesigns of businesses occurred to pursue both continuity and competitive advantage. Among these, the food retail sector has undergone under the pressure of the crisis intense digital changes, which, however, have not yet been investigated under the theoretical lens of BMI. To fill this gap, the paper analyzes the digital actions taken during the pandemic crisis by two large food retailers, namely Walmart and Carrefour. Covering a wide temporal interval of the pandemic evolution and reviewing multiple geographical markets, the authors interpreted the grocer's digital responses to the crisis in terms of innovation in value creation and capture mechanisms. As a result, three phases of digital BMI have been reconstructed, each characterized by specific mechanisms of value creation and capture experienced by the two grocers during the pandemic. Leveraging these findings, the paper proposes a model capable of defining how digital BMI takes place in response to crises. Results broaden theoretical knowledge and practical suggestions on digital BMI in terms of enabling factors, actionable value mechanisms, and future business opportunities.

Multifactorial Evaluation of Spatial Suitability and Economic Viability of Light Green Bridges Using Remote Sensing Data and Spatial Urban Planning Criteria

Multi-faceted stresses of social, environmental, and economic nature are increasingly challenging the existence and sustainability of our societies. Cities in particular are disproportionately threatened by global issues such as climate change, urbanization, population growth, air pollution, etc. In addition, urban space is often too limited to effectively develop sustainable, nature-based solutions while accommodating growing populations. This research aims to provide new methodologies by proposing lightweight green bridges in inner-city areas as an effective land value capture mechanism. Geometry analysis was performed using geospatial and remote sensing data to provide geometrically feasible locations of green bridges. A multi-criteria decision analysis was applied to identify suitable locations for green bridges investigating Central European urban centers with a focus on German cities as representative examples. A cost-benefit analysis was performed to assess the economic feasibility using a case study. The results of the geometry analysis identified 3249 locations that were geometrically feasible to implement a green bridge in German cities. The sample locations from the geometry analysis were proved to be validated for their implementation potential. Multi-criteria decision analysis was used to select 287 sites that fall under the highest suitable class based on several criteria. The cost-benefit analysis of the case study showed that the market value of the property alone can easily outweigh the capital and maintenance costs of a green bridge, while the indirect (monetary) benefits of the green space continue to increase the overall value of the green bridge property including its neighborhood over time. Hence, we strongly recommend light green bridges as financially sustainable and nature-based solutions in cities worldwide.

Digital technology and business model innovation: A systematic literature review and future research agenda

Digital technologies (e.g. Industry 4.0, Internet of Things, cloud computing, big data, blockchain, etc.), are profoundly affecting companies' activities and processes, thus leading to changes in firms' value creation, value delivery, and value capture mechanisms. Yet, despite significant investments in digital technologies and digital transformation, firms are struggling to yield the most out of them, thereby facing a digital paradox. This scenario has drawn the attention of academics and practitioners leading to a growing body of literature on the relationship between digital technology and business model innovation. Yet, the extant academic research in this area appears highly fragmented. Hence, this study conducts a systematic literature review to gather and synthesize the extant knowledge on this topic. The review identifies four main thematic areas, provides an interpretative framework, and suggests valuable future research directions within each thematic area. The article contributes to the theoretical and managerial discussion on digital-driven business model innovation.

Defining the ground for land-use-based direct public-value capture in Austria

The discussion whether and how to capture the increment of land value has been present in academia and politics for decades. Only few countries have established comprehensive systems to calculate land values and introduce a regulatory basis to directly or indirectly capture increments linked to land-use planning decisions for the public good. This article elaborates the potentials of and barriers to implementing a land-use-based direct value-capture mechanism within Austria’s fragmented planning regime. The considerations are built upon an analysis of the existing framework and instruments linked to land value and planning to identify the context of constraints for an additional or replacing instrument. Based on a legal analysis and qualitative expert interviews, key aspects for linking value capture to land-use planning decisions are identified and conclusions drawn based on a recent discussion in Austria.

Financing cleaner transportation: understanding changing trends in capturing developer contributions towards sustainable transport infrastructure

ABSTRACT Transportation and accessibility remain an important consideration in land use planning decision-making if modal shifts towards sustainable forms of transport are to be encouraged. Land value capture (LVC) mechanisms which gather developer contributions can provide new transport infrastructure which supports such a shift. Within England, this has traditionally been pursued through negotiated section 106 agreements, yet data suggest a significant decline in the value of these contributions for transport measures since 2010. This paper investigates the reduction to understand the reasons behind it and then considers the resulting implications for policy and LVC practices using a qualitative synthesis.

Mechanisms for Business Ecosystem Members to Capture Value through the Strong Network Effect

Business ecosystem leaders tend to focus on their own success rather than carefully monitoring the success of business ecosystem members, and each member must find a mechanism to capture value. Rarely has business ecosystem research examined the success of business ecosystem members. This study investigates the mechanisms by which business ecosystem members capture value in the business ecosystem related to different types of storage formats and how these mechanisms contribute to the sustainability of the business ecosystem. We identify two value capture mechanisms in the storage business ecosystem. First, media manufacturers, being members of the storage business ecosystem, can capture value through strong network effect in the server backup markets. They can sell a significant amount of media for every single unit of a drive sold through the strong network effect. Second, media manufacturers can capture value by selling their media repeatedly as consumables for many years. We quantitatively confirm these mechanisms using a vector autoregressive model to measure the strength of the indirect network effect. These mechanisms help business ecosystem members in staying within the business ecosystem and also contribute to the business ecosystem’s sustainability.

Public Value Capture, Climate Change, and the ‘Infrastructure Gap’ in Coastal Development: Examining Evidence from France and Greece

This paper examines the role that two Public Value Capture (PVC) mechanisms could play in providing a source of funding for urban infrastructure in the case of two coastal areas in France and Greece. High development pressures in those areas have been exacerbated in recent times by the growing ‘informality of desire’. Therefore, in a context of climate change the two case study areas face the dual challenge of an increasing ‘investment gap’ and increasing vulnerability. Although the estimated costs are still based on approximate calculations, they are substantive. Using primary and secondary data, as well as analysis of the legal and policy framework, the paper shows that ‘informality of desire’ is not only tolerated but actually incentivised in both countries. This leads to substantial short-term financial benefits for private developers and property owners but also some gains for local authorities and central governments. However, the value captured via the legalisation fees and property taxation is not adequately ringfenced and in any case it is not enough to cover the infrastructure gap and the potential compensation in case of natural disasters.

Sustainable value creation and organizational performance in industrial manufacturing companies

PurposeThis study aims to analyze the influence of sustainable value creation (composed of social, economic and environmental dimensions) on organizational performance in Colombian industrial manufacturing companies.Design/methodology/approachThis study had a sample of 1,572 companies belonging to the Colombian manufacturing industrial sector. These companies were consulted by the survey of technological development and innovation in the manufacturing industry EDIT IX. For this study’s purpose, a model was developed from a variance-based structural equation modeling or partial least squares.FindingsThe results indicated that the associated mechanisms of the social, economic and environmental dimensions contribute in a significant, positive and large way to the creation of sustainable value for the companies studied. The findings show the importance of the social, economic and environmental dimensions in the creation of sustainable value and in turn, their influence on organizational performance.Social implicationsThe findings obtained provide industrial companies and society with resources to understand that economic development can respond to business logic different from those imposed by current neoliberal models.Originality/valueThis study provides an understanding of the value capture mechanisms of small- and medium-sized companies considering the environmental needs of the territory and the community where the business activities take place while generating economic profitability for the other stakeholders.

Legal Business Model Digitalization: The Post COVID-19 Legal Industry

The rapid expansion in globalization, changing economic and political conditions, health crisis, advancement in technologies, and customer demand shift have highlighted the business model concept’s growing importance in every business life walk. Despite the agreement on the business model’s role in innovation and firm success, this concept is unnoticed in the legal industry. The growing digitalization has disrupted the legal industry business model by enabling various cooperation, collaboration, value proposition, and value capture mechanism. Digitalization has innovated the legal business model and engaged them in the mundane adaptation in response to external environment changes. However, literature trends reveal that innovation in the legal business model is overlooked by academia. This study applied a case study method to highlight business model innovation in legal firms in the proposed framework of the business model navigator/magic triangle and business model canvas. We also took the market and industry trends and COVID-19 into consideration in the legal business landscape. This study proposed a digital business model and innovation operating model for the legal firms based on the identified fundamental pillars of digital business model components. This study expands the literature on digitalization and business model innovation by focusing on an ignored industry with substantial disruptive potential.

Paths and patterns of value capture innovation in sharing economy

The purpose of this research is to investigate value capture innovation in sharing economy platforms. Revenue management and pricing strategies are indeed pivotal aspects platforms should care about when (re)configuring their business models. A mixed-method investigation has been performed to achieve this goal: a longitudinal content analysis and a case studies analysis. Results from the first step of the research show that four main typologies of innovation emerge in the analyzed platforms. Furthermore, the case studies analysis reveals three main patterns (Network, Monetization, Lock-in) and the possible paths a platform can undergo when innovate its value capture mechanisms.