Determinants of Foreign Versus Domestic Real Estate Investment: Property Level Evidence from Listed Real Estate Investment Firms

Nathan Mauck and S. McKay Price ()
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S. McKay Price: Lehigh University

The Journal of Real Estate Finance and Economics, 2017, vol. 54, issue 1, No 2, 17-57

Abstract: Abstract We examine the determinants of foreign real estate investment relative to the domestic case using the portfolios of a large sample of publicly traded real estate investment companies; where foreign investment is defined as the property owner headquarters being located in a different country than a given asset. The cross-sectional results provide strong evidence that real estate firms are more likely to take a smaller stake in larger assets when investing abroad. The penchant for large assets holds when controlling for economic activity, real estate investment opportunities, depth and sophistication of the capital markets, investor protection and the legal framework, administrative burdens and regulatory limitations, and the socio-cultural and political environment at both the property nation and headquarter nation levels. In general, foreign ownership is less likely with industrial, office, retail, and self-storage properties. Capital market development is consistently negatively related to foreign investment.

Keywords: Real estate investment; International real estate; International finance; Foreign investment (search for similar items in EconPapers)
JEL-codes: F21 G11 G23 O16 O18 P52 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (9)

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DOI: 10.1007/s11146-015-9532-1

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