Abstract
Using a sample of REITs from twelve countries around the world, we examine the determinants of REIT capital structure. We investigate firm-specific and country-specific factors, and account for the unique legal requirements that REITs face in each country. Our results suggest that legal requirements are significant determinants of the capital structure of REITs. Specifically, we find that REITs have the highest book debt ratio in countries where they must pay out most of their operating income. This result implies that REITs prefer debt financing to equity financing. Additionally, we find that in countries with no payout requirement, but leverage restrictions, REITs have lower book leverage, which suggests that internal financing is preferred to external financing. Our findings also indicate that country-specific factors do not have significant impact on REIT leverage.
| Original language | English (US) |
|---|---|
| Journal | Journal of Real Estate Finance and Economics |
| DOIs | |
| State | Accepted/In press - Jan 1 2019 |
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Keywords
- Capital structure
- Regulation
- REITs
ASJC Scopus subject areas
- Accounting
- Finance
- Economics and Econometrics
- Urban Studies
Cite this
On the Determinants of REIT Capital Structure : Evidence from around the World. / Dogan, Yunus Yasin; Ghosh, Chinmoy; Petrova, Milena.
In: Journal of Real Estate Finance and Economics, 01.01.2019.Research output: Contribution to journal › Article
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TY - JOUR
T1 - On the Determinants of REIT Capital Structure
T2 - Evidence from around the World
AU - Dogan, Yunus Yasin
AU - Ghosh, Chinmoy
AU - Petrova, Milena
PY - 2019/1/1
Y1 - 2019/1/1
N2 - Using a sample of REITs from twelve countries around the world, we examine the determinants of REIT capital structure. We investigate firm-specific and country-specific factors, and account for the unique legal requirements that REITs face in each country. Our results suggest that legal requirements are significant determinants of the capital structure of REITs. Specifically, we find that REITs have the highest book debt ratio in countries where they must pay out most of their operating income. This result implies that REITs prefer debt financing to equity financing. Additionally, we find that in countries with no payout requirement, but leverage restrictions, REITs have lower book leverage, which suggests that internal financing is preferred to external financing. Our findings also indicate that country-specific factors do not have significant impact on REIT leverage.
AB - Using a sample of REITs from twelve countries around the world, we examine the determinants of REIT capital structure. We investigate firm-specific and country-specific factors, and account for the unique legal requirements that REITs face in each country. Our results suggest that legal requirements are significant determinants of the capital structure of REITs. Specifically, we find that REITs have the highest book debt ratio in countries where they must pay out most of their operating income. This result implies that REITs prefer debt financing to equity financing. Additionally, we find that in countries with no payout requirement, but leverage restrictions, REITs have lower book leverage, which suggests that internal financing is preferred to external financing. Our findings also indicate that country-specific factors do not have significant impact on REIT leverage.
KW - Capital structure
KW - Regulation
KW - REITs
UR - http://www.scopus.com/inward/record.url?scp=85060035993&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=85060035993&partnerID=8YFLogxK
U2 - 10.1007/s11146-018-9687-7
DO - 10.1007/s11146-018-9687-7
M3 - Article
AN - SCOPUS:85060035993
JO - Journal of Real Estate Finance and Economics
JF - Journal of Real Estate Finance and Economics
SN - 0895-5638
ER -