Document Type

Article

Language

eng

Publication Date

8-2016

Publisher

Springer

Source Publication

Journal of Real Estate Finance and Economics

Source ISSN

0895-5638

Abstract

This study investigates the determinants of capital structure decisions by real estate firms, with a specific focus on the impact of political risk on leverage. Using a sample of Asia-Pacific REITs and listed property trusts, we find those firms with properties located in countries characterized by relatively high degrees of political risk, such as political instability, and/or greater uncertainty in the ability to repatriate and monetize profits from international investment activities, employ less debt than their counterparts operating in more politically stable environments. This core finding remains robust to alternative sample selection criteria including the division of the sample into high versus low market-to-book value firms, and also holds within the subset of organizations that are active in raising additional capital in the secondary markets.

Comments

Accepted version. The Journal of Real Estate Finance and Economics, Vol. 53, No. 2 (August 2016): 115-140. DOI. © 2017 Springer International Publishing AG. Part of Springer Nature.

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