Economies-of-Scale for Real Estate Investment Trusts

Topics:
Regulatory Compliance
Tags:
Business Operations,
College Of Business & Economics,
Finance,
Investment,
Real Estate,
REIT
Source:
College of Business & Economics

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Overview: This paper outlines a sample of Real Estate Investment Trusts for, using the translog cost function to estimate economies-of-scale and finds significant evidence that economies-of-scale exist for REITs for all years examined. The results show that measurement of scale economies is sensitive to the model used for the measurement. Individual characteristics of the REIT affect the magnitude of the scale economy. Additional variables accounting for property type diversification and geographic influences have little additional impact on the measured scale economies. Finally, the measured economies-of-scale for REITs vary considerably over time.

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Format: PDF | Size: 647KB | Date: Apr 1999 | Pages: 17


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