Corporate Governance and Performance: The REIT Effect
Piet Eichholtz and
Real Estate Economics, 2010, vol. 38, issue 1, pages 1-29
Real estate investment trusts (REITs) offer a natural experiment in corporate governance due to the fact that they leave little free cash flow for management, which reduces agency problems. We exploit a unique and leading corporate governance database to test whether corporate governance matters for the performance of U.S. REITs. We document for a sample including governance ratings of more than 220 REITs that firm value is significantly related to firm-level governance for REITs with low payout ratios only. Repeating the analysis with the complete database that includes more than 5,000 companies and a control sample of firms with high corporate real estate ratios, we find a strong and significantly positive relation between our governance index and several performance variables, indicating that the partial lack of a relation between governance and performance in the real estate sector might be explained by a REIT effect. Copyright (c) 2009 American Real Estate and Urban Economics Association.
References: Add references at CitEc
Citations View citations in EconPapers (11) Track citations by RSS feed
Downloads: (external link)
http://www.blackwell-synergy.com/doi/abs/10.1111/j.1540-6229.2009.00252.x link to full text (text/html)
Access to full text is restricted to subscribers.
Working Paper: Corporate Governance and Performance: the REIT Effect (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: http://EconPapers.repec.org/RePEc:bla:reesec:v:38:y:2010:i:1:p:1-29
Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1080-8620
Access Statistics for this article
Real Estate Economics is currently edited by Crocker Liu, N. Edward Coulson and Walter Torous
More articles in Real Estate Economics from American Real Estate and Urban Economics Association Contact information at EDIRC.
Series data maintained by Wiley-Blackwell Digital Licensing ().