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

pdf

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

Creative Commons Attribution 4.0 License
This work is licensed under a Creative Commons Attribution 4.0 License.

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