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Article: Institutional common ownership and firm value: Evidence from real estate investment trusts

TitleInstitutional common ownership and firm value: Evidence from real estate investment trusts
Authors
Issue Date2021
Citation
Real Estate Economics, 2021, v. 49, n. 1, p. 187-223 How to Cite?
AbstractThis paper contributes to the ongoing debate about whether and how institutional common ownership (ICO) affects firm behavior. Using a sample of equity real estate investment trusts (REITs), which provide significant advantages for isolating a monitoring channel, we find a robust and positive relation between ICO and REIT firm value. The positive relation between ICO and firm value is driven mainly by motivated investors and becomes stronger when we construct our ICO measures using blockholdings. Our difference-in-differences analysis, using mergers between institutional investors, suggests a causal relation exists between ICO and firm value. After investigating various channels through which ICO could affect firm behavior, we conclude that asset allocation decisions and performance are the most plausible explanations. Our finding that the monitoring associated with ICO aids managers in their portfolio disposition strategies further supports this conclusion. This enhanced monitoring leads to increased property portfolio returns, as well as more geographic diversification.
Persistent Identifierhttp://hdl.handle.net/10722/301787
ISSN
2020 Impact Factor: 3.418
2020 SCImago Journal Rankings: 1.064
ISI Accession Number ID

 

DC FieldValueLanguage
dc.contributor.authorLing, David C.-
dc.contributor.authorWang, Chongyu-
dc.contributor.authorZhou, Tingyu-
dc.date.accessioned2021-08-19T02:20:44Z-
dc.date.available2021-08-19T02:20:44Z-
dc.date.issued2021-
dc.identifier.citationReal Estate Economics, 2021, v. 49, n. 1, p. 187-223-
dc.identifier.issn1080-8620-
dc.identifier.urihttp://hdl.handle.net/10722/301787-
dc.description.abstractThis paper contributes to the ongoing debate about whether and how institutional common ownership (ICO) affects firm behavior. Using a sample of equity real estate investment trusts (REITs), which provide significant advantages for isolating a monitoring channel, we find a robust and positive relation between ICO and REIT firm value. The positive relation between ICO and firm value is driven mainly by motivated investors and becomes stronger when we construct our ICO measures using blockholdings. Our difference-in-differences analysis, using mergers between institutional investors, suggests a causal relation exists between ICO and firm value. After investigating various channels through which ICO could affect firm behavior, we conclude that asset allocation decisions and performance are the most plausible explanations. Our finding that the monitoring associated with ICO aids managers in their portfolio disposition strategies further supports this conclusion. This enhanced monitoring leads to increased property portfolio returns, as well as more geographic diversification.-
dc.languageeng-
dc.relation.ispartofReal Estate Economics-
dc.titleInstitutional common ownership and firm value: Evidence from real estate investment trusts-
dc.typeArticle-
dc.description.naturelink_to_subscribed_fulltext-
dc.identifier.doi10.1111/1540-6229.12312-
dc.identifier.scopuseid_2-s2.0-85085485653-
dc.identifier.volume49-
dc.identifier.issue1-
dc.identifier.spage187-
dc.identifier.epage223-
dc.identifier.eissn1540-6229-
dc.identifier.isiWOS:000536713800001-

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