‘Corporate Governance and Performance: The REIT Effect’

with Rob Bauer and Piet Eichholtz, Real Estate Economics, 2010, 31(1)	Download
Abstract	Spin-offs
Real estate investment trusts (REITs) offer a natural experiment in corporate governance due to the fact that they leave little free cash flow for management, which reduces agency problems. We exploit a unique and leading corporate governance database to test whether corporate governance matters for the performance of U.S. REITs. We document for a sample including governance ratings of more than 220 REITs that firm value is significantly related to firm- level governance for REITs with low payout ratios only. Repeating the analysis with the complete database that includes more than 5,000 companies and a control sample of firms with high corporate real estate ratios, we find a strong and significantly positive relation between our governance index and several performance variables, indicating that the partial lack of a relation between governance and performance in the real estate sector might be explained by a REIT effect.	‘Transparantie in Beursgenoteerd Vastgoed: Toezicht Sterk, Duurzaamheid Zwak’, Real Estate Magazine, May 2009.
	In the news
	‘Belangen Beleggers Zeker Gesteld in Fbi-Vorm en REIT, Het Financieele Dagblad, December 8, 2008. ‘Corporate Governance and Sustainability in Global Property Markets’, 2008, Economisch Statistische Berichten (ESB) nr 4548
	Academic presentations
	INQUIRE Europe Autumn Seminar, Oslo (2007) National University of Singapore, Singapore (2007) International AREUEA Meeting, Macau (2007) European Real Estate Society, London (2007) IREBS Symposium, Regensburg, Germany (2007)