Evaluating the impact of

economic factors on REITs

capital structure around the world
Antonios Rovolis
Department of Geography, Harokopio University, Athens, Greece, and
Andreas Feidakis
Bank of Greece, Athens, Greece
Abstract
Purpose This paper aims to examine the determinants of the capital structure of real estate
investment trusts (REITs) across the world and explore whether this structure is characterized by any
common factors.
Design/methodology/approach Endogenous and exogenous factors that affect the nancial
management of real estate rms are identied in the analysis. Regular (static) panel data regression
analysis, as well as dynamic panel data techniques, is applied to a panel of listed real estate rms from
2005 to 2010.
Findings Empirical results showed that factors such as tangibility, size of the company, growth
opportunities, assets turnover affect positively the nancial leverage of REITs; conversely, other
determinants, being debits cost, GDP, and long-term interest rates, are negatively correlated with the
nancial gearing of the REITs.
Practical implications This paper identies factors that determine the capital structure of REITs
around the world. Firm executives and policy makers in different countries may wish to adjust their
policies (regarding capital structure) according to the empirical ndings.
Originality/value This study, using a comprehensive dataset from all over the world, investigates
whether there are solid and mutual factors that can characterize the capital structure of REITs.
Keywords Capital structure, Panel data, Real estate markets
Paper type Research paper
1. Introduction
Capital structure literature presents a paradox; the seminal paper of Modigliani and
Miller (1958) should have ended any theoretical research, as it argued that capital
structure is irrelevant in perfect capital markets (PCM). However, this topic has
produced since then a voluminous body of research based on the idea that the PCM
hypothesis is not empirically validated. In fact, current literature has provided ample
evidence that the optimal capital structure of a rmcan be affected by a range of factors.
Some authors have argued that taxes and bankruptcy costs affect the capital structure of
rms (Miller, 1977; DeAngelo and Masulis, 1980); the tradeoff theory (optimization
theory) argues that rms seek debt levels that the tax advantages of additional debt
offset the costs of possible nancial distress and thus set a target debt to value ratio and
gradually moving towards it (Kim, 1978; Kraus and Litzenberger, 1973). Agency costs
theory asserts that debt motivates managers to be efcient and calls these positive
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1463-578X.htm
The views expressed in this article do not necessarily represent the views of the Bank of Greece.
Received December 2012
Accepted August 2013
Journal of Property Investment &
Finance
Vol. 32 No. 1, 2014
pp. 5-20
qEmerald Group Publishing Limited
1463-578X
DOI 10.1108/JPIF-08-2013-0050
Impact of
economic factors
5
effects of debt the Control Hypothesis for debt creation when rm managers have
substantial cash ow, they can waste the cash by consuming perquisites or by investing
in low return projects ( Jensen, 1986; Jensen and Meckling, 1976). The pecking order
theory (POT) discusses the information asymmetry between managers and investors.
In particular, managers possess privileged information about the rm value that
investors do not. For this reason, POT claims that rms prefer internal to external
nancing and debt to equity, when issuing securities to avoid the potential valuation
discount associated with equity issues. By contrast, when rms use external funds, they
prefer to issue the safest security rst (i.e. debt), then convertible securities and equity as
a last resort (Myers and Majluf, 1984; Myers, 1977).
This paper tries to identify the main determinants of capital structure, either
microeconomic or macroeconomic, utilizing a rather large dataset regarding real estate
investment trusts (REITs). The remainder of the paper is organized as follows;
Section 2 provides a short-presentation of the main theories regarding capital structure;
Section 3 presents the dataset and the variables used in the empirical analysis; Section 4
offers a compact presentation of the used econometric methods and of the empirical
ndings; the last part summarizes the analysis.
2. Theoretical framework
As we argued above, a number of competing theories have been used in the capital
structure analysis. Tradeoff theory emphasizes on taxes, the pecking order theory on
asymmetric information and the free cash ow theory on agency costs. Several studies
attempt to nd evidence in order to corroborate these theories.
Rajan and Zingales (1995) investigated the determinants of capital structure choice
in the G-7 countries and discovered that at aggregate level, rm leverage is fairly
similar across them. Antoniou et al. (2002) investigated the determinants of leverage in
France, Germany and the UK and found that the effects of possible determinants of
capital structure are country specic.
Titman and Wessels (1988) concluded that short-term debt is negatively related to
rm size. Rajan and Zingales (1995) stated that leverage increases with size because
larger rms are better diversied and have a lower probability of being in nancial
distress; lower bankruptcy costs enable themto take on more leverage. Harris and Raviv
(1991), using a cross-sectional test, discovered that leverage increases with rm size.
Michaelas et al. (1999) test the capital structure of small rms in the UKand argued that
size and gearing is positively related in agreement with Antoniou et al. (2002) and Frank
and Goyal (2004).
Michaelas et al. (1999) noted that protability and gearing are negatively related in
agreement with the pecking order theory and are consistent with the results of Titman
and Wessels (1988), Antoniou et al. (2002), Booth et al. (2001), Frank and Goyal (2004)
and Bevan and Danbolt (2004).
Fama and French (2002) argued that, due to their level of diversication, larger
rms are expected to have less volatile earnings, which in return induce a higher
leverage ratio.
Rajan and Zingales (1995) recommended that the greater the proportion of tangible
assets on the balance sheet, the more willing should lenders be to supply loans, and
leverage should be higher. Titman and Wessels (1998) provided evidence that rms in
possession of assets with high collateral value choose high debt levels in harmony with
JPIF
32,1
6
Michaelas et al. (1999), Antoniou et al. (2002), Frank and Goyal (2004), Swinnen et al.
(2005) and Bevan and Danbolt (2004).
RajanandZingales (1995) showedthat growthopportunities are signicantlynegatively
associated with leverage, which is consistent with Antoniou et al. (2002) and Frank and
Goyal (2004); on the contrary, Michaelas et al. (1999) indicated a positive relationship
between growth opportunities and gearing ratios at one with Bevan and Danbolt (2004).
3. Data and variables
Even though the study of capital structure can be applied to any industry, it is
interesting to examine the behaviour of real estate rms, and especially REITs (for the
proliferation of this type of companies around the world see, for instance, Schacht and
Wimschulte (2008); for some other interesting topics regarding REITs see, for instance in
this journal, Liu et al. (2012), Chang et al. (2012) and Khaled and Keef (2012)). These
companies are operating in an economic environment which is characterized by a special
set of rules, specic at country level. In the last decades, however, the increasing
integration of nancial markets has led to a corresponding increasing integration of
urban property markets. Thus, a multitude of factors, of microeconomic and
macroeconomic nature, is expected to affect the nancial behaviour of real estate rms.
The study is based on nancial data collected from the balance sheet and income
statement of REITs from 20 countries (Table I). The data were obtained from the
database of Datastream. All rms are publicly traded and listed on the main stock
markets of their countries. The sampling period is 2005-2010.
The information obtained was rened; cases with errors or lost values or
outstanding prices in the accounting data were removed. After applying the above
considerations, we created a panel dataset comprising 2,004 observations
corresponding to 334 rms. The sample also includes rms in nancial distress to
avoid survival bias.
Australia 38
Belgium 10
Bulgaria 10
Canada 23
France 36
Germany 3
Greece 3
Hong Kong 4
Japan 13
Malaysia 3
The Netherlands 7
New Zealand 4
Singapore 10
South Africa 5
South Korea 1
Taiwan 1
Thailand 2
Turkey 9
UK 17
USA 135
Total 334
Table I.
REITs per country
Impact of
economic factors
7
To build the dynamic case of our model (Section 4), we presume that the nancial
structure of a rm is inuenced by a number of exogenous and endogenous variables.
As exogenous variables, we think about time and macroeconomic factors such as the
gross domestic product (GDP), and long-term interest rates. It is obvious that, these
factors characterize the inuence of the external environment on the capital structure of
the rm. As endogenous variables, we employed nancial factors from the nancial
statements of the rm such as protability, tangibility, size, growth opportunities,
business risk, interest coverage, assets turnover, cost of debt. We assume that these
factors determine the capital structure of the rm and vice versa. Taking into
consideration that all these variables are accounting data that are calculated from
nancial statements, it is hard to accept that these variables are really exogenous along
the lines of Kremp et al. (1999) and Antoniou et al. (2002).
Dependent variable
(1) Leverage Total liabilities/Total assets (DEBTTL). This variable has been
used by many authors in similar studies (Westgaard et al., 2008; Morri and
Cristanziani, 2009; Antoniou et al., 2002; Norvaisiene and Stankeviciene, 2007).
According to Welch (2011), this is a superior denition of leverage to the
alternative Total debt/Total assets.
Independent variables
(1) Protability EBITDA/Total assets (PROFIT). EBITDA is the variable for
earnings before interest, tax, depreciation and amortization. This measure for
protability is very popular (Westgaard et al., 2008; Dang, 2011) as it is not
inuenced by interest, taxes and depreciation that are in different rates across the
countries of our data. Tradeoff theory states that since less protable rms
provide lower returns for shareholders, a great degree of leverage will increase
bankruptcy risk and the cost of borrowing, and will therefore diminish further
lower shareholders returns. Consequently, rms with insufcient prots will
avoid external nancing and additional leverage in particular. Moreover, there
will also be a demand side effect as the market will be reluctant to provide capital
to such rms. On the other hand, the tax deductibility of interest payments is
expected to stimulate more protable rms to further nance the bulk of their
operations with debt. Thus, according to the tradeoff theory, there is a positive
relation between leverage and protability. The POT (Myers, 1977) predicts the
existence of a negative relationship among the two factors; more protable rms
will demand less debt than less protable ones since they will be expected to have
internal funds available to nance projects.
(2) Tangibility Fixed assets/Total assets (TANG). This ratio measures the
relationship xed assets and total assets. A high ratio means that some of the
xed assets are nanced by means of debt. This proxy is used by Rajan and
Zingales (1995), Michaelas et al. (1999), Kremp et al. (1999), Filbeck and Gorman
(2000), Bevan and Danbolt (2004), Antoniou et al. (2002), Bontempi (2002) and
Feidakis and Rovolis (2007).
(3) Size of the company Natural logarithm of total assets (LNTA). This is a
denition used by Dang (2011), Gureshi and Azid (2006), Morri and Cristanziani
JPIF
32,1
8
(2009), Stephan et al. (2008), Zheng et al. (2012), Norvaisiene and Stankeviciene
(2007), Morri and Cristanziani (2009) and Venkiteshwaran (2011).
(4) Growth opportunities (Market to book ratio) (Total liabilities Market value
of equity)/Total assets (MBRATIO). This ratio compares the markets valuation
of a rm to the value of that rm as indicated on its nancial statements. A high
ratio may signal that the rm has good growth opportunities. This proxy is
used by Antoniou et al. (2002), Frank and Goyal (2004) and Rajan and Zingales
(1995). The Tradeoff theory predicts that rms with more investment
opportunities will be characterised by a lower amount of debt. This behaviour
can also be read as a disciplinary role of debt: rms with more investment
opportunities have less need of the disciplining effect of debt payments to
control free cash ows (control hypothesis). In addition, assuming that rms are
concerned with future as well as with current nancing problems, it is very
likely that rms with large expected growth opportunities will maintain a low
risk debt capacity to avoid nancing future investment with equity offerings.
On the other hand, as stated by POT, debt is supposed to grow when
investments exceed retained earnings and to fall when investments are less
than retained earnings and thus, leverage is predicted to be higher for rms that
face higher investment opportunities.
(5) Business risk (Unlevered beta) beta/[1 (1 2 T)
*
(D/E)] , beta
*
E/(D E) (UNGEARED_BETA), where T Tax, D Total debt and
E Equity. The ungeared beta is calculated from the observed beta to reect
the beta value which would be observed if the company was all equity nanced.
It is therefore indicative of the systemic business risk of the company. This
variable correlates the share of the company without its debt with the market
index. This proxy is used by Morri and Cristanziani (2009).
(6) Interest coverage EBITDA/interest expense on debt (INTCOV). This variable
is used to determine howeasily a company can pay interest on outstanding debt.
This determinant is an indicator of a rms safety margin in order for its credit
risk to be estimated. The lower the ratio, the more the company is burdened by
debt expense. Conversely, a high coverage ratio indicates that the company is
nancially secure enough to meet its interest payments on time. However, a high
ratio may also be a sign that a company has an undesirable lack of debt or is
paying off its debt too quickly, using earnings that might be better invested in
projects that could yield higher returns. Furthermore, it is sometimes cheaper for
a company to borrow more funds at a lower cost of capital than to currently pay
for its existing debt to meet its obligations.
(7) Assets turnover Sales/Total assets (ASSTURN). Low values of this ratio
show low productivity of the companys management. It has been used by
Westgaard et al. (2008).
(8) Debits cost Debts interest payments/Total debt (COSTDEBT). This variable
shows the degree to which a company is in debt; it has been used by Morri and
Cristanziani (2009).
(9) Growth in GDP. The annual percentage change of GDP.
(10) Long-term interest rates (LOINT). Yields of ten years government bonds.
Impact of
economic factors
9
4. Econometric methodology
In the subsequent analysis, a simple ordinary least square (OLS) regression is applied for
every set of independent variables. Then, the xed effects panel data estimator model
(or, as it is called in the following tables, least squares with group dummy variables) has
been utilized (for an introduction in panel data analysis and these estimators see, for
instance, Baltagi (2005).
However, as Nickell (1981) has shown, the xed effects estimator may be severely
biased (especially in the case where the time dimension of the panel dataset is small), as
the within transformation leads to a correlation between the (lagged) endogenous
variable and the disturbances. For a proper estimation of a dynamic model, several
alternative estimators have been proposed.
One such estimator was proposed by Anderson and Hsiao (1982) and is based on the
differenced formof the original equation. The problemis that the Anderson-Hsiao is not
necessarily the most efcient, as it does not use all available instruments. Additionally,
for the implementation of this estimator there is the restrictive in many cases
assumption that the explanatory variables are exogenous. Arellano and Bond (1991)
proposed as an alternative a generalized method of moments (GMM) approach. The
Arrelano-Bond estimator (which in the subsequent analysis will be called DIF-GMM)
exploits additional moment restrictions (derived from the assumption of orthogonality
between lagged levels of the dependent variable and transformed disturbances), which
enlarges the set of instruments. Other, than the dependent, explanatory variables can be
either exogenous, predetermined, or endogenous.
Two-step GMM estimators, such as the Arrelano-Bond estimator, in small samples
may be severely biased downwards. This is a result of the fact that the usual asymptotic
standard errors do not take into account the extra variation in small samples in itself,
due to the use of estimated parameters in constructing the efcient weight matrix
(Windmeijer, 2005, p. 49). In order to overcome this potential problem, the Windmeijer
(2005) nite sample correction to the standard errors was adopted.
The major weakness of the DIF-GMMestimator is that lagged levels of series may be
weak instruments for the rst differences (especially when the series are highly
persistent or the variance of the individual effects is high relative to the variance of the
disturbances).
The Arrelano-Bond estimator can be inefcient in the case in which the instruments
are weak, as it utilizes only information contained in differences only. The instruments
are weak when individual series are highly persistent or the individual effects variance
is high relatively to the variance of transient shocks. An alternative estimator,
sometimes called Blundell-Bond estimator (in the subsequent analysis it will be called
the SYS-GMM estimator), overcomes the weak instrument problem (for a more detailed
presentation of this estimator see, for instance, Arellano and Bover (1995) and Blundell
and Bond (1998)). What the SYS-GMM estimator essentially does is to add a system of
equations in levels to that in rst differences, and to use the untransformed levels of
equations as instruments to the lagged rst differences.
There can be one-step and two-step estimations of SYS-GMM. As these procedures
produced similar results in the empirical analysis section, only the ndings from the
two-step estimations are hereby presented. In these tables, the Arellano-Bond AR(1)
and AR(2) tests are used to test for rst and second-order autocorrelation in the
residuals.
JPIF
32,1
10
In dynamic specications, the Hansen J test of over-identifying restrictions is
reported; this test can be found in different contexts as Sargan test, Sargan-Hansen
test, or Hansen J test, or, as in the subsequent analysis, Hansen test. This test explores
the joint null hypothesis that the model is properly specied and that the instruments
used are uncorrelated with the error term. It has to be noted that the Hansen test is
robust to heteroscedasticity and autocorrelation. The Sargan/Hansen tests (Sargan,
1958; Hansen, 1982) statistic is distributed a x
2
; a signicant value for the test suggests
that the (overidentifying) restrictions are invalid.
The results analysis is broken down to three parts. The rst part discusses the
ndings in the standard case (non-dynamic) regressions, and the second part
presents the results of the dynamic analysis. The latter is divided, in turn, in two sets of
results; in the rst, only the microeconomic factors are considered, and in the second
both microeconomic and macroeconomic factors are included in the regressions. Every
set of dynamic regressions has DIF-GMM and SYS-GMM estimated regressions; the
microeconomic determinants of capital structure are treated as exogenous and the
other determinants as endogenous in regressions marked as endog, and all
determinants are treated as exogenous in regressions marked as endog.
Additionally, for comparison reasons, we test our model with the assumption that
all independent capital structure determinants are exogenous. We can assert that, the
results from the exogenous model conrm the results from the
endogenous-exogenous model. Nevertheless, the endogenous-exogenous model
recommends more signicant factors and thus provides evidence for the impact of
more capital structure determinants.
Tables II and III present the results for the standard regressions; the empirical
ndings show that REITs leverage is related (that is the estimates are statistically
signicant) positively to tangibility, size of the company, growth opportunities, assets
turnover, and negatively to protability, debits cost, GDP, and long-term interest
rates.
Tables IV and V show the estimates from the dynamic panel regressions. These
results corroborate the analysis of regular (static) regressions (or, in other words,
there is a high degree of stability in the empirical ndings). Generally speaking the
relationships between REITs leverage and the explanatory variables have the same
signs as in the regular regressions. One notable difference is that GDP is not
statistically signicant in any of the dynamic calibrations.
5. Conclusions
This paper examines the capital structure determinants of REITs globally. The dataset
contains accounting data from income statements and balance sheets as well as other
microeconomic and macroeconomic data for the period 2005-2010.
The results provide evidence that, despite the important differences that emerge
regarding the particular characteristics (nancial, legal, traditional, etc.) of each
country, there are strong factors concerning the common capital structure choice in the
global REITs industry. We nd several factors that illustrate a core and quite robust
model.
All equations are calibrated in two basic categories, a set of regular (static)
regressions (OLS, xed and random panel regressions) and a set of dynamic
regressions.
Impact of
economic factors
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JPIF
32,1
12
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)
M
B
R
A
T
I
O
0
.
0
5
0
3
*
*
0
.
0
3
6
5
*
*
*
0
.
0
3
1
0
*
*
*
(
0
.
0
1
9
6
)
(
0
.
0
1
2
6
)
(
0
.
0
1
1
0
)
U
N
G
E
A
R
E
D
_
B
E
T
A
2
0
.
1
7
8
*
*
*
2
0
.
0
3
2
1
2
0
.
0
4
4
1
*
*
(
0
.
0
4
3
3
)
(
0
.
0
2
2
9
)
(
0
.
0
2
1
5
)
I
N
T
C
O
V
0
.
0
0
0
0
1
0
2
0
.
0
0
0
0
3
9
7
*
*
*
0
.
0
0
0
0
3
7
0
(
0
.
0
0
0
0
7
8
5
)
(
0
.
0
0
0
0
1
2
2
)
(
0
.
0
0
0
0
2
3
7
)
A
S
S
T
U
R
N
0
.
4
0
4
*
*
*
0
.
1
4
5
*
*
0
.
1
5
3
*
*
*
(
0
.
0
4
1
3
)
(
0
.
0
6
8
0
)
(
0
.
0
5
2
5
)
C
O
S
T
D
E
B
T
2
0
.
3
0
1
*
*
*
2
0
.
2
1
2
*
*
2
0
.
2
3
1
*
*
*
(
0
.
0
9
6
8
)
(
0
.
0
8
9
1
)
(
0
.
0
7
7
6
)
G
D
P
2
0
.
0
0
5
9
4
*
*
*
2
0
.
0
0
2
6
1
*
*
*
2
0
.
0
0
2
7
5
*
*
*
(
0
.
0
0
1
8
2
)
(
0
.
0
0
0
8
3
1
)
(
0
.
0
0
0
8
4
2
)
L
O
I
N
T
2
0
.
0
2
7
6
*
*
*
2
0
.
0
1
1
7
*
*
*
2
0
.
0
1
4
1
*
*
*
(
0
.
0
0
4
2
1
)
(
0
.
0
0
3
4
4
)
(
0
.
0
0
3
3
6
)
_
c
o
n
s
0
.
5
0
2
*
*
*
2
0
.
0
9
0
7
0
.
1
4
4
(
0
.
0
6
0
7
)
(
0
.
1
7
8
)
(
0
.
1
1
5
)
A
d
j
.
R
2
0
.
1
8
8
0
.
8
5
2
n
1
,
5
2
2
1
,
5
2
2
1
,
5
2
2
N
o
t
e
s
:
S
i
g
n
i

c
a
n
t
a
t
:
*
p
,
0
.
1
0
,
*
*
p
,
0
.
0
5
a
n
d
*
*
*
p
,
0
.
0
1
;
s
t
a
n
d
a
r
d
e
r
r
o
r
s
i
n
p
a
r
e
n
t
h
e
s
e
s
Table III.
Regression results
(microeconomic and
macroeconomic
variables)
Impact of
economic factors
13
D
I
F
r
o
b
-
2
w
e
n
d
o
g
S
Y
S
r
o
b
-
2
w
e
n
d
o
g
D
I
F
r
o
b
-
2
w
e
x
o
g
S
Y
S
r
o
b
-
2
w
e
x
o
g
D
e
p
e
n
d
e
n
t
D
E
B
T
T
L
L
.
D
E
B
T
T
L
0
.
7
6
9
*
*
*
0
.
2
8
4
*
*
0
.
7
5
2
*
*
*
0
.
1
8
9
*
*
*
(
0
.
0
8
0
9
)
(
0
.
1
1
5
)
(
0
.
0
5
0
9
)
(
0
.
0
6
9
5
)
P
R
O
F
I
T
2
0
.
3
9
9
*
*
*
2
0
.
3
7
4
*
*
*
2
0
.
3
7
4
*
*
*
2
0
.
2
0
8
*
*
*
(
0
.
0
6
7
3
)
(
0
.
0
5
5
5
)
(
0
.
0
5
2
9
)
(
0
.
0
4
9
7
)
T
A
N
G
0
.
0
3
8
6
*
*
0
.
0
2
3
1
0
.
0
7
0
9
*
*
*
0
.
0
2
8
1
(
0
.
0
1
7
0
)
(
0
.
0
2
3
1
)
(
0
.
0
2
1
0
)
(
0
.
0
4
8
8
)
L
N
T
A
0
.
0
0
4
9
6
0
.
0
2
1
4
2
0
.
0
0
1
4
2
0
.
0
0
9
2
2
(
0
.
0
0
3
6
5
)
(
0
.
0
1
9
9
)
(
0
.
0
0
6
2
2
)
(
0
.
0
2
8
1
)
M
B
R
A
T
I
O
0
.
0
2
6
2
*
*
0
.
0
1
7
1
*
0
.
0
1
9
0
0
.
0
2
1
1
(
0
.
0
1
1
9
)
(
0
.
0
0
9
9
7
)
(
0
.
0
1
3
8
)
(
0
.
0
1
5
5
)
U
N
G
E
A
R
E
D
_
B
E
T
A
2
0
.
0
8
5
6
*
*
*
2
0
.
0
3
0
7
2
0
.
0
6
4
7
*
*
*
0
.
0
2
5
3
(
0
.
0
2
3
8
)
(
0
.
0
3
3
7
)
(
0
.
0
2
1
9
)
(
0
.
0
1
8
4
)
I
N
T
C
O
V
0
.
0
0
0
0
3
6
9
*
*
*
0
.
0
0
0
0
4
6
5
*
0
.
0
0
0
0
3
7
3
*
*
*
0
.
0
0
0
0
3
8
2
*
*
(
0
.
0
0
0
0
1
0
7
)
(
0
.
0
0
0
0
2
3
9
)
(
0
.
0
0
0
0
1
2
9
)
(
0
.
0
0
0
0
1
9
2
)
A
S
S
T
U
R
N
0
.
1
1
6
*
*
0
.
0
0
6
7
8
0
.
1
1
6
2
0
.
1
0
2
(
0
.
0
5
0
1
)
(
0
.
0
7
1
5
)
(
0
.
0
7
6
4
)
(
0
.
1
1
6
)
C
O
S
T
D
E
B
T
2
0
.
1
1
2
2
0
.
2
0
8
2
0
.
2
7
8
*
2
0
.
2
1
0
(
0
.
2
1
6
)
(
0
.
1
9
3
)
(
0
.
1
6
2
)
(
0
.
1
3
2
)
Y
1
0
.
0
1
4
3
*
*
0
.
0
0
8
6
6
0
.
0
1
1
3
*
*
2
0
.
0
0
9
5
0
*
(
0
.
0
0
5
7
3
)
(
0
.
0
0
6
1
6
)
(
0
.
0
0
5
5
7
)
(
0
.
0
0
4
9
2
)
Y
2
0
.
0
5
1
4
*
*
0
.
0
2
0
4
0
.
0
4
5
2
*
*
2
0
.
0
4
6
2
*
*
(
0
.
0
2
0
5
)
(
0
.
0
2
3
4
)
(
0
.
0
2
0
3
)
(
0
.
0
2
1
2
)
Y
3
0
.
0
5
5
0
*
*
*
0
.
0
2
1
6
0
.
0
4
3
6
*
*
*
2
0
.
0
2
6
2
*
(
0
.
0
1
5
9
)
(
0
.
0
1
7
1
)
(
0
.
0
1
4
7
)
(
0
.
0
1
5
0
)
Y
4
0
.
0
5
7
2
*
*
*
0
.
0
3
0
0
*
*
*
0
.
0
4
9
6
*
*
*
0
.
0
0
1
5
3
(
0
.
0
0
9
5
8
)
(
0
.
0
1
1
3
)
(
0
.
0
0
9
8
2
)
(
0
.
0
0
8
6
0
)
_
c
o
n
s
2
2
8
.
6
9
*
*
2
2
2
.
4
8
*
*
(
1
1
.
5
3
)
(
1
1
.
2
1
)
n
1
,
2
9
7
1
,
0
0
6
1
,
2
9
7
1
,
0
0
6
n
o
f
i
n
s
t
r
.
2
7
2
2
1
7
1
1
2
6
(
c
o
n
t
i
n
u
e
d
)
Table IV.
Dynamic regression
results (microeconomic
variables)
JPIF
32,1
14
D
I
F
r
o
b
-
2
w
e
n
d
o
g
S
Y
S
r
o
b
-
2
w
e
n
d
o
g
D
I
F
r
o
b
-
2
w
e
x
o
g
S
Y
S
r
o
b
-
2
w
e
x
o
g
S
a
r
g
a
n
t
e
s
t
(
p
-
v
a
l
u
e
)
5
7
.
8
8
1
9
.
1
4
8
1
5
.
1
0
2
9
1
.
3
4
0
.
0
0
0
0
.
0
2
4
0
.
0
0
0
0
.
0
0
0
H
a
n
s
e
n
t
e
s
t
(
p
-
v
a
l
u
e
)
2
2
.
3
8
1
4
.
7
2
1
8
5
.
7
0
1
5
1
.
9
6
0
.
0
5
0
0
.
0
9
9
0
.
0
5
8
0
.
0
0
9
A
-
B
A
R
(
1
)
t
e
s
t
(
p
-
v
a
l
u
e
)
2
4
.
1
8
2
2
.
0
2
2
4
.
3
1
2
1
.
8
5
0
.
0
0
0
0
.
0
4
4
0
.
0
0
0
0
.
0
6
4
A
-
B
A
R
(
2
)
t
e
s
t
(
p
-
v
a
l
u
e
)
1
.
6
2
1
.
2
1
1
.
5
8
0
.
7
8
0
.
1
0
5
0
.
2
2
6
0
.
1
1
3
0
.
4
3
3
N
o
t
e
s
:
C
o
e
f

c
i
e
n
t
s
a
r
e
s
i
g
n
i

c
a
n
t
o
r
t
h
e
r
e
l
e
v
a
n
t
n
u
l
l
i
s
r
e
j
e
c
t
e
d
a
t
:
*
1
0
,
*
*
5
a
n
d
*
*
*
1
p
e
r
c
e
n
t
l
e
v
e
l
;
y
e
a
r
d
u
m
m
i
e
s
a
r
e
i
n
c
l
u
d
e
d
i
n
a
l
l
m
o
d
e
l
s
;
a
l
l
s
t
a
n
d
a
r
d
e
r
r
o
r
s
a
r
e
r
o
b
u
s
t
t
o
h
e
t
e
r
o
s
c
e
d
a
s
t
i
c
i
t
y
a
n
d
a
u
t
o
c
o
r
r
e
l
a
t
i
o
n
;
w
i
t
h
D
I
F
-
G
M
M
,
a
r
e
t
h
e
e
s
t
i
m
a
t
o
r
s
f
r
o
m
t
h
e
t
w
o
s
t
e
p
G
M
M

r
s
t
d
i
f
f
e
r
e
n
c
e
s
m
o
d
e
l
(
A
r
e
l
l
a
n
o
a
n
d
B
o
n
d
,
1
9
9
1
)
;
w
i
t
h
S
Y
S
-
G
M
M
,
a
r
e
t
h
e
e
s
t
i
m
a
t
o
r
s
f
r
o
m
t
h
e
t
w
o
s
t
e
p
G
M
M
s
y
s
t
e
m
m
o
d
e
l
(
B
l
u
n
d
e
l
l
a
n
d
B
o
n
d
,
1
9
9
8
)
;
t
h
e
s
t
a
n
d
a
r
d
e
r
r
o
r
s
f
r
o
m
t
h
e
t
w
o
s
t
e
p
G
M
M
e
s
t
i
m
a
t
o
r
s
a
r
e
b
a
s
e
d
o
n
t
h
e

n
i
t
e
s
a
m
p
l
e
c
o
r
r
e
c
t
i
o
n
o
f
W
i
n
d
m
e
i
j
e
r
(
2
0
0
5
)
;
t
h
e
H
a
n
s
e
n
t
e
s
t
r
e
f
e
r
s
t
o
t
h
e
t
e
s
t
o
f
o
v
e
r
-
i
d
e
n
t
i
f
y
i
n
g
r
e
s
t
r
i
c
t
i
o
n
s
;
A
-
B
A
R
(
1
)
t
e
s
t
r
e
f
e
r
s
t
o
t
h
e
A
r
e
l
l
a
n
o
-
B
o
n
d
t
e
s
t
f
o
r

r
s
t
o
r
d
e
r
a
u
t
o
c
o
r
r
e
l
a
t
i
o
n
i
n
t
h
e

r
s
t
d
i
f
f
e
r
e
n
c
e
d
r
e
s
i
d
u
a
l
s
;
A
-
B
A
R
(
2
)
t
e
s
t
r
e
f
e
r
s
t
o
t
h
e
A
r
e
l
l
a
n
o
-
B
o
n
d
t
e
s
t
f
o
r
s
e
c
o
n
d
o
r
d
e
r
a
u
t
o
c
o
r
r
e
l
a
t
i
o
n
i
n
t
h
e

r
s
t
d
i
f
f
e
r
e
n
c
e
d
r
e
s
i
d
u
a
l
s
Table IV.
Impact of
economic factors
15
D
I
F
r
o
b
-
2
w
e
n
d
o
g
S
Y
S
r
o
b
-
2
w
e
n
d
o
g
D
I
F
r
o
b
-
2
w
e
x
o
g
S
Y
S
r
o
b
-
2
w
e
x
o
g
D
e
p
e
n
d
e
n
t
D
E
B
T
T
L
L
.
D
E
B
T
T
L
0
.
7
8
2
*
*
*
0
.
2
9
5
*
*
0
.
7
4
1
*
*
*
0
.
1
8
8
*
*
*
(
0
.
0
7
9
7
)
(
0
.
1
2
0
)
(
0
.
0
5
3
0
)
(
0
.
0
6
9
5
)
P
R
O
F
I
T
2
0
.
4
1
2
*
*
*
2
0
.
3
8
3
*
*
*
2
0
.
3
8
7
*
*
*
2
0
.
2
0
8
*
*
*
(
0
.
0
6
6
1
)
(
0
.
0
5
7
5
)
(
0
.
0
5
4
2
)
(
0
.
0
4
9
6
)
T
A
N
G
0
.
0
3
5
5
*
*
0
.
0
2
0
8
0
.
0
6
4
9
*
*
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0
.
0
3
0
3
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0
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0
1
7
0
)
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0
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3
3
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0
.
0
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9
4
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(
0
.
0
4
9
8
)
L
N
T
A
0
.
0
0
2
9
7
0
.
0
2
3
3
2
0
.
0
0
5
2
9
0
.
0
1
3
3
(
0
.
0
0
3
4
0
)
(
0
.
0
2
0
3
)
(
0
.
0
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7
6
1
)
(
0
.
0
2
8
0
)
M
B
R
A
T
I
O
0
.
0
2
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*
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.
0
1
5
6
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.
0
1
7
4
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1
9
4
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0
.
0
1
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9
7
6
)
(
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.
0
1
3
6
)
(
0
.
0
1
6
2
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U
N
G
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A
R
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D
_
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E
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2
0
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8
4
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*
2
0
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0
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4
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2
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.
0
6
1
8
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.
0
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4
5
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0
.
0
2
4
7
)
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6
3
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0
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1
3
)
(
0
.
0
1
7
0
)
I
N
T
C
O
V
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0
0
0
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4
3
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0
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1
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.
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0
0
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4
3
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0
.
0
0
0
0
1
4
5
)
(
0
.
0
0
0
0
1
9
8
)
A
S
S
T
U
R
N
0
.
1
1
5
*
*
0
.
0
1
0
0
0
.
1
3
3
2
0
.
1
1
0
(
0
.
0
5
1
3
)
(
0
.
0
7
5
4
)
(
0
.
0
8
0
6
)
(
0
.
1
1
2
)
C
O
S
T
D
E
B
T
2
0
.
1
4
1
2
0
.
1
9
7
2
0
.
2
7
8
*
2
0
.
1
8
7
(
0
.
2
2
2
)
(
0
.
1
9
5
)
(
0
.
1
6
2
)
(
0
.
1
3
3
)
G
D
P
0
.
0
0
0
7
1
0
0
.
0
0
0
0
7
8
0
2
0
.
0
0
1
6
3
2
0
.
0
0
0
3
6
6
(
0
.
0
0
1
4
2
)
(
0
.
0
0
1
0
5
)
(
0
.
0
0
1
4
1
)
(
0
.
0
0
1
1
6
)
L
O
I
N
T
2
0
.
0
0
5
3
3
2
0
.
0
0
8
5
0
*
*
2
0
.
0
0
8
9
0
*
*
2
0
.
0
0
5
2
7
(
0
.
0
0
4
0
2
)
(
0
.
0
0
4
0
1
)
(
0
.
0
0
4
5
2
)
(
0
.
0
0
3
7
4
)
Y
1
0
.
0
1
1
0
0
.
0
0
6
1
4
0
.
0
1
3
7
*
*
2
0
.
0
0
9
6
7
*
(
0
.
0
0
6
7
3
)
(
0
.
0
0
6
7
9
)
(
0
.
0
0
6
7
6
)
(
0
.
0
0
5
4
3
)
Y
2
0
.
0
4
3
9
*
0
.
0
1
8
8
0
.
0
6
4
4
*
*
*
2
0
.
0
4
0
1
*
(
0
.
0
2
4
0
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0
.
0
2
5
7
)
(
0
.
0
2
4
8
)
(
0
.
0
2
2
7
)
Y
3
0
.
0
5
0
1
*
*
*
0
.
0
2
0
0
0
.
0
5
6
4
*
*
*
2
0
.
0
2
2
4
(
0
.
0
1
8
0
)
(
0
.
0
1
8
5
)
(
0
.
0
1
7
8
)
(
0
.
0
1
5
4
)
Y
4
0
.
0
4
9
5
*
*
*
0
.
0
1
8
1
0
.
0
3
9
7
*
*
*
2
0
.
0
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4
8
8
(
0
.
0
1
0
8
)
(
0
.
0
1
1
3
)
(
0
.
0
1
2
5
)
(
0
.
0
0
9
0
7
)
(
c
o
n
t
i
n
u
e
d
)
Table V.
Dynamic regression
results (microeconomic
and macroeconomic
variables)
JPIF
32,1
16
D
I
F
r
o
b
-
2
w
e
n
d
o
g
S
Y
S
r
o
b
-
2
w
e
n
d
o
g
D
I
F
r
o
b
-
2
w
e
x
o
g
S
Y
S
r
o
b
-
2
w
e
x
o
g
_
c
o
n
s
2
2
1
.
9
2
2
2
7
.
2
4
*
*
(
1
3
.
5
2
)
(
1
3
.
6
1
)
n
1
,
2
9
7
1
,
0
0
6
1
,
2
9
7
1
,
0
0
6
n
o
f
i
n
s
t
r
.
2
9
2
4
1
7
3
1
2
8
S
a
r
g
a
n
t
e
s
t
(
p
-
v
a
l
u
e
)
5
7
.
1
0
2
1
.
3
8
8
2
2
.
6
0
2
8
9
.
8
6
0
.
0
0
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0
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0
4
2
0
.
0
0
0
0
.
0
0
0
H
a
n
s
e
n
t
e
s
t
(
p
-
v
a
l
u
e
)
2
2
.
0
3
1
.
3
6
1
8
2
.
5
5
1
5
1
.
6
6
0
.
0
5
5
0
.
1
7
4
0
.
0
8
0
0
.
0
0
9
A
-
B
A
R
(
1
)
t
e
s
t
(
p
-
v
a
l
u
e
)
2
4
.
2
0
2
2
.
0
4
2
4
.
2
7
2
1
.
8
6
0
.
0
0
0
0
.
0
4
2
0
.
0
0
0
0
.
0
6
2
A
-
B
A
R
(
2
)
t
e
s
t
(
p
-
v
a
l
u
e
)
1
.
6
7
1
.
3
6
1
.
7
0
0
.
8
6
0
.
0
9
5
0
.
1
7
4
0
.
0
8
9
0
.
3
9
1
N
o
t
e
s
:
C
o
e
f

c
i
e
n
t
s
a
r
e
s
i
g
n
i

c
a
n
t
o
r
t
h
e
r
e
l
e
v
a
n
t
n
u
l
l
i
s
r
e
j
e
c
t
e
d
a
t
:
*
1
0
,
*
*
5
a
n
d
*
*
*
1
p
e
r
c
e
n
t
l
e
v
e
l
;
y
e
a
r
d
u
m
m
i
e
s
a
r
e
i
n
c
l
u
d
e
d
i
n
a
l
l
m
o
d
e
l
s
;
a
l
l
s
t
a
n
d
a
r
d
e
r
r
o
r
s
a
r
e
r
o
b
u
s
t
t
o
h
e
t
e
r
o
s
c
e
d
a
s
t
i
c
i
t
y
a
n
d
a
u
t
o
c
o
r
r
e
l
a
t
i
o
n
;
w
i
t
h
D
I
F
-
G
M
M
,
a
r
e
t
h
e
e
s
t
i
m
a
t
o
r
s
f
r
o
m
t
h
e
t
w
o
s
t
e
p
G
M
M

r
s
t
d
i
f
f
e
r
e
n
c
e
s
m
o
d
e
l
(
A
r
e
l
l
a
n
o
a
n
d
B
o
n
d
,
1
9
9
1
)
;
w
i
t
h
S
Y
S
-
G
M
M
,
a
r
e
t
h
e
e
s
t
i
m
a
t
o
r
s
f
r
o
m
t
h
e
t
w
o
s
t
e
p
G
M
M
s
y
s
t
e
m
m
o
d
e
l
(
B
l
u
n
d
e
l
l
a
n
d
B
o
n
d
,
1
9
9
8
)
;
t
h
e
s
t
a
n
d
a
r
d
e
r
r
o
r
s
f
r
o
m
t
h
e
t
w
o
s
t
e
p
G
M
M
e
s
t
i
m
a
t
o
r
s
a
r
e
b
a
s
e
d
o
n
t
h
e

n
i
t
e
s
a
m
p
l
e
c
o
r
r
e
c
t
i
o
n
o
f
W
i
n
d
m
e
i
j
e
r
(
2
0
0
5
)
;
t
h
e
H
a
n
s
e
n
t
e
s
t
r
e
f
e
r
s
t
o
t
h
e
t
e
s
t
o
f
o
v
e
r
-
i
d
e
n
t
i
f
y
i
n
g
r
e
s
t
r
i
c
t
i
o
n
s
;
A
-
B
A
R
(
1
)
t
e
s
t
r
e
f
e
r
s
t
o
t
h
e
A
r
e
l
l
a
n
o
-
B
o
n
d
t
e
s
t
f
o
r

r
s
t
o
r
d
e
r
a
u
t
o
c
o
r
r
e
l
a
t
i
o
n
i
n
t
h
e

r
s
t
d
i
f
f
e
r
e
n
c
e
d
r
e
s
i
d
u
a
l
s
;
A
-
B
A
R
(
2
)
t
e
s
t
r
e
f
e
r
s
t
o
t
h
e
A
r
e
l
l
a
n
o
-
B
o
n
d
t
e
s
t
f
o
r
s
e
c
o
n
d
o
r
d
e
r
a
u
t
o
c
o
r
r
e
l
a
t
i
o
n
i
n
t
h
e

r
s
t
d
i
f
f
e
r
e
n
c
e
d
r
e
s
i
d
u
a
l
s
Table V.
Impact of
economic factors
17
The results recommend that tangibility, size of the company, growth opportunities,
assets turnover affect positively the nancial leverage of REITs; conversely, other
determinants, i.e. debits cost, GDP, and long-term interest rates, are negatively
correlated with the nancial gearing of the REITs.
As a whole, the results seem reasonable, with theories in the literature supporting
the observed relationships. This type of analysis could be extended to more industries
and countries as further research.
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Corresponding author
Antonios Rovolis can be contacted at: rovolis@hua.gr
JPIF
32,1
20
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