How Does Corporate Governance Affect the Quality of Investor Information? The Curious Case of REITs
Robert Edelstein (),
Yanmin Gao () and
Desmond Tsang ()
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Robert Edelstein: University of California at Berkeley
Yanmin Gao: University of Alberta
Desmond Tsang: McGill University
Journal of Real Estate Research, 2011, vol. 33, issue 1, 1-24
Recent research suggests that the unique legal and organizational structure of REITs, relative to other types of corporations, may vitiate the need for and the effectiveness of internal corporate governance. Our results indicate that information asymmetry, as measured by the percentage bid-ask spreads demanded by the market, is reduced by appropriately structured REIT governance. Using data during the 2003-2006 period, we find that increasing the financial incentives for board members reduces asymmetric information, and that the combination of experienced board members and independent audit committees with financial expertise diminishes asymmetric information.
JEL-codes: L85 (search for similar items in EconPapers)
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