The Wealth Effects of Domestic vs International Joint Ventures: The Case of Real Estate

Ling T. He, F.C. Neil Myer () and James R. Webb ()
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Ling T. He: Department of Economics & Finance Christopher Newport University Newport News, Virginia 23606, http://www.cnu.edu/econ/index.html
F.C. Neil Myer: Department of Finance James J. Nance College of Business Administration Cleveland State University Cleveland, Ohio 44114, http://www.csuohio.edu/finance_department/index.htm
James R. Webb: Department of Finance James J. Nance College of Business Administration Cleveland State University Cleveland, Ohio 44114, http://www.csuohio.edu/finance_department/index.htm

Journal of Real Estate Research, 1997, vol. 13, issue 3, pages 349-358

Abstract: This study examines the wealth effect of international versus domestic real estate joint ventures on the U.S. participating firm's shareholders. This is done using traditional even study methodology for real estate joint venture announcements. The results suggest that domestic real estate joint ventures generally result in a significant increase in the firm's value, while international real estate joint ventures usually have a much less significant to nonsignificant wealth impact. This may be due to the immovability of real properties in foreign countries and the large amount of initial investment in real estate that increase both political and economic risks for international real estate joint ventures. This study also finds that hotel joint ventures generally have a weaker wealth effect than non-hotel real estate joint ventures.

JEL-codes: L85 (search for similar items in EconPapers)
Date: 1997
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