scholarly journals Return Enhancing, Cash-Rich or Simply Empire-Building? An Empirical Investigation of Corporate Real Estate Holdings

2013 ◽  
Author(s):  
Charles Ka Yui Leung
Keyword(s):  
Real Estate ◽  
Empirical Investigation ◽  
Empire Building ◽  
Corporate Real Estate

International Real Estate Review

2014 ◽  
Vol 17 (3) ◽  
pp. 301-357
Author(s):  
Julan Du ◽  
◽  
Charles K. Leung ◽  
Derek Chu ◽  
◽  
...  
Keyword(s):  
Corporate Governance ◽  
Real Estate ◽  
Lower Degree ◽  
Future Research ◽  
Financial Constraint ◽  
Research Directions ◽  
Empire Building ◽  
Corporate Real Estate ◽  
Future Research Directions ◽  
The Impact

No, we find no evidence for a return-enhancing role for corporate real estate holdings, which is consistent with the previous literature. Instead, our study based on a sample of U.S. listed corporations suggests that corporate real estate holdings are a form of managerial ¡§empire building¡¨. Corporations with weaker corporate governance and a lower degree of financial constraint tend to have higher real estate holdings, whereas higher real estate holdings are associated with lower returns to shareholders. The impact of corporate governance on corporate real estate holdings seems to be stronger in manufacturing-related industries. Implications and future research directions are discussed.

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