Document Type
Article
Publication Date
5-20-2021
Publication Title
International Journal of Strategic Property Management
Volume
25
Issue
4
First page number:
316
Last page number:
331
Abstract
This paper considers the aggregate profitability performance of the REIT industry. The aggregate performance depends on the underlying microeconomic dynamics within an industry – the growth of individual REITs (the within ef-fect), the reallocation between existing REITs (the between effect), the entry of new REITs (the entry effect), and the exit of the existing REITs (the exit effect). We apply an extended Bennet (1920) dynamic decomposition on the REIT industry’s return on equity (ROE) and study the annual data on U.S. Equity REITs for the 1989 to 2015 period and various REIT industry specific sub-sample periods. Bailey et al.’s (1992) and Haltiwanger’s (1997) dynamic industry performance decom-positions are special cases of the Bennet decomposition. The “within” and “between” effects dominate the annual changes in this industry’s ROE. To the extent that our Equity REIT sample proxies for the FTSE NAREIT All Equity Index, our conclusions also relate to this index’s profitability performance between 1989 and 2015.
Keywords
Aggregate fluctuations; Dynamic decomposition; ROE change
Disciplines
Finance and Financial Management
File Format
File Size
481 KB
Language
English
Rights
IN COPYRIGHT. For more information about this rights statement, please visit http://rightsstatements.org/vocab/InC/1.0/
Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 License.
Repository Citation
Feng, Z.,
Miller, S.,
Tirtiroglu, D.
(2021).
U.S. Reit Industry Profitability: A Bennet Decomposition of Industry Dynamics.
International Journal of Strategic Property Management, 25(4),
316-331.
http://dx.doi.org/10.3846/ijspm.2021.14958