Predicting the REIT Corporate Life Cycle Phase on a Financial Accounting Basis

Panagiotis Petris ()
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Panagiotis Petris: Department of Economics, National and Kapodistrian University of Athens, 1 Sofokleous str., 10559 Athens, Greece

JRFM, 2023, vol. 16, issue 6, 1-14

Abstract: This study investigates the effect of financial–accounting variables on a firm’s distinct life cycle phase. The study concentrates on the real estate sector and uses data of publicly listed REITs which are traded in the European market. To assess the empirical argument, a multinomial panel logit model is employed. The empirical results show that leverage, dividend distribution, the size and the sales variable have significant predictive power over the corporate life cycle classification of an REIT. Higher leverage is associated with an elevated probability of the REIT being classified in the early stage of its corporate life cycle, as opposed to the maturity stage. Positive leverage variation is also a significant predictor of the REIT being categorized in the shake–out stage, while lower dividend distribution, negative sales and size variation are all associated with an increased probability of the REIT being classified in the decline stage, rather than in the maturity phase.

Keywords: corporate life cycles; financial accounting ratios; multinomial logit model(s); European REITs (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2023
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