An Analysis of Corporate Real Estate Strategies to the Return and Risk of Shareholders: Taiwan’s Case

• Main Authors: Sheng-En Cho, 卓聖恩
• Other Authors: Ming-Chi Chen
• Format: Others
• Language: en_US
• Published: 2011
• Online Access: http://ndltd.ncl.edu.tw/handle/22949857582461195060

碩士 === 國立中山大學 === 財務管理學系研究所 === 99 === This study examines whether different corporate real estate (CRE) strategies affect the stock outperformance and systemic risk of various companies. The sample of 443 listed companies of 17 industries in Taiwan during 2000 to 2010 was divided into four groups for the different corporate real estate strategies. The pairwise abnormal return and systemic risk of composite and business (without the affect from real estate market) series were empirically examined and compared using a partial adjustment model. This study also conducts the two-stage least squares procedure to determine whether four CRE strategies were considered diversifiable factors when evaluating the firm’s value The results do not indicate an increasingly abnormal return performance associated with the company implementing a certain CRE strategy, but companies with a stable profession and consistent adjustment strategies are considered a good diversifier by stock investors. Aggressive adjustment strategies do not diversify the systematic risk to overall industry, otherwise the scale of total assets would be considered a diversification in companies with aggressive strategies. The companies using an aggressive profession strategy to increase leverage are regarded as risky phenomen for stock investors, and companies with stable profession strategies face higher systemic risk if their book value is greater than their market value. Therefore, this study determines that CRE strategies affect companies’ systematical risk.