Capital structure decisions of LPTs in a small economy

Dong, Zhi

doi:10.1108/14635781211256756

Cited by 4 publications

(4 citation statements)

References 17 publications

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“…They also found that non-REIT companies were significantly more leveraged than REITs. In New Zealand and Australia, the research about capital structure in NZ LPTs was done by Dong (2012). In this study, trade-off theory was followed by the NZ LPTs, and the exchange rate of NZ dollar was estimated to be explaining the capital structure of NZ PLTs significantly.…”

Section: Literature Of Property Firms' Financial Behaviourmentioning

confidence: 99%

An explanation of capital structure of China's listed property firms

Liang

Li²,

Song

2014

Property Management

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If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. AbstractPurpose -The purpose of this paper is to investigate the determinants of the capital structure of listed property firms in China. Design/methodology/approach -The study is based on quantitative methods such as dynamic panel data models and a panel data set containing financial and accounting data for all listed property companies from 2006 to 2010 in China. Findings -The findings confirm that the state-own shares, the fixed asset values, the total size of assets and profitability have a positive and significant impact on the leverage ratio of listed property firms in China. The negative impact of the tax shields and the currency ratio, and significant impact of state-own shares on capital structure cannot be explained by existing capital structure theory but the unique property market regulation environment and market conditions in China.Research limitations/implications -The findings confirm the applicability of trade-off theory (except for the correlation between leverage and the tax shield) on property companies in China. They also highlight the importance of government policies and special market conditions in explaining the financing behaviour of property companies in transaction countries like China.Practical implications -Complimentary policies should be established along with property market restriction policies to offset their unequal negative effect on property companies with less state-owned shares. Furthermore, government should invest efforts to eliminate the discrimination credit treatment of banks against property companies with non-existent or few state-owned shares. Originality/value -The special financial behaviour of China's property firms and the unique financial and property market conditions highlight the necessity of researching the capital structure of listed property firms in China. However, most of the existing literature focuses on the company financial behaviour in developed countries, and very few studies have been done concerning property firms' financing behaviour in emerging economies such as China, and this research prospects to fill this blank.

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Section: Literature Of Property Firms' Financial Behaviourmentioning

confidence: 99%

An explanation of capital structure of China's listed property firms

Liang

Li²,

Song

2014

Property Management

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“…With regard to capital structure, REITs as public should also raise capital to finance its operation. Study from (Dong, 2012) found that Listed Property Trusts (LPTs), name for REITs in New Zealand, tend to reduce long-term debt in its capital structure when there is appreciation on New Zealand dollar one-year forwards rate because it will favour LPTs to get short-term debt overseas with foreign currency, thus shrinking long-term debt leverage. However, REITs with high market valuation tend to have persistent and high leverage (Feng, Ghosh, & Sirmans, 2007).…”

Section: Methodsmentioning

confidence: 99%

Literature Review on REITs and Islamic REITs and Lessons Learned for Islamic REITs in Indonesia

Indrawan

Wahyuningsih

2019

ijief

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Real Estate Investment Trusts (REITs) as a new instrument in many capital markets is an interesting topic.Although not yet to be popular globally, REITs has gained popularity as flexible, cost efficient and profitable real estate investment vehicle for investors as well as provide liquidity for real estate sector, especially in advanced markets like in US, Japan and Singapore. The emergence of Islamic Financial Institutions (IFIs) coincided with increasing popularity of REITs open opportunity for development of Islamic REITs (I-REITs) as competitive but sharia compliant REITs compared to the conventional one. The dominance of Malaysia as market player of I-REITs as well as many underresearched areas open opportunity for betterment of the current I-REITs markets. This paper is a literature review with two objectives. First, to compile and review existing articles on REITs, both conventional and Islamic, and second, to gain lesson learned as material for development of I-REITs in Indonesia as ultimate goal. It is expected that this literature review will generate ideas for future development proposals on I-REITs, particularly in Indonesia. This study found that literature on I-REITs is relatively thin compared to its conventional counterparts, and Indonesia is still left behind in I-REITs development despite regulatory framework is already in force. Therefore, further effort to promote supply and demand of I-REITs in Indonesia should be taken as a way to diversify Islamic investment avenues for sharia oriented investors.

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“…However, existing literature has confirmed that fundamental business factors should determine REITs' optimal as-set composition, income composition, and leverage ratio. These factors include market price (Chan et al, 2005), asset liquidation value (Giambona et al, 2008;Danielsen et al, 2014), market-to-book value (Feng et al, 2007), financing cost and risk (Ooi, 1999;Sha et al, 2020), global fund flow (Dong, 2012), and economic circle (Lee et al, 2016;Ruddock & Ruddock, 2014). Thus, REITs are motivated to use EM approaches to trim their financial reports to fit REIT regulations.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Pass-Through Business Entity Choice and Earnings Management: Evidence From Uk Real Estate Investment Trust Conversion

Liang

Dong

Zheng

2022

International Journal of Strategic Property Management

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This empirical study innovatively investigates how the choice of a pass-through business entity and corresponding regulatory regime influence firms’ earnings management (EM) behaviors by testing on the UK Real Estate Investment Trust (REIT) conversion. A substantial proportion of UK non-REIT publicly traded property companies (LPCs) have chosen to become REITs since the UK REITs were launched in 2007. We conduct a series of tests on a database containing UK LPCs and REITs from 2000 to 2019 and find that conversion into pass-through business entity regimes like REITs that enjoy more favorable tax treatment but face more restrictions leads to more accrual earnings management (AEM) activity, but less real earnings management (REM) activity.

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Capital structure decisions of LPTs in a small economy

Cited by 4 publications

References 17 publications

An explanation of capital structure of China's listed property firms

An explanation of capital structure of China's listed property firms

Literature Review on REITs and Islamic REITs and Lessons Learned for Islamic REITs in Indonesia

Pass-Through Business Entity Choice and Earnings Management: Evidence From Uk Real Estate Investment Trust Conversion

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