Real Earnings Management and Dividend Payout Signals: A Study for U.S. Real Estate Investment Trusts

How Do Institutional Factors Affect International Real Estate Returns?

“…We find that none of these restrictions appear to be significant. We attribute our findings to the likelihood that these regulatory constraints are seldom binding for a typical REIT (e.g., Edelstein et al 2009). country's market excess returns are computed by taking the difference of the country's market index returns.…”

An Examination of Prevalence of Earnings Management in Asia REITs

“…Studies on earnings management in Asian REITs are still lacking, with most carried out on U.S.REITs (Alcock et al, 2013;Ambrose & Bian, 2009;Deng & Ong, 2018;Edelstein, Liu, & Tsang, 2008;Zhu, Ong, & Yeo, 2010a). Edelstein et al (2008) find evidence of REITs with cash constraint in U.S. mitigate the effects of dividend pay-out regulations by engaging in real earnings management (REM) activities either by reducing revenue or increasing expenses which would reduce the taxable income. Besides, Ambrose et al (2010) find that information contained in stock price volatility motivates REIT managers to engage in negative real earnings management to avoid more actively the regulatory costs by avoiding the mandatory dividend pay-out requirement.…”

“…In view of REITs increasing popularity in Asia and its status as an exotic investment alternative for investors in Asia with market capitalization expected to reach around US$200 billion by 2020 (Ooi, Newell, & Sing, 2006), this study is conducted to examine the prevalence of earnings management activities in Asian REITs particularly in Malaysia, Singapore and Hong Kong using the discretionary accruals method. The use of discretionary accruals in this study compared to real earnings management to detect the earnings management activities in REITs is due to most of the previous studies are focus on real activities of earnings management (Deng & Ong, 2018;Edelstein et al, 2008). The use of discretionary accruals to detect the earnings management especially in Asia REITs is still lacking.…”

Earnings Management: A Case of New Zealand Listed Property Trusts

“…As a result, advancing expenses with a corresponding reduction in earnings for a particular period allows fund managers and companies in most industries to smooth earnings over time and maintain a dividend during poor performance periods. For Real Estate Investment Trusts (REITs) in the US, this may become a serious issue since a large proportion of profits (95%) for these firms must be paid as dividends in order to receive taxexemptions and benefits (Edelstein et al, 2008). However, REITs typically pay out in excess of the required earnings ratio because of market expectations and the Downloaded by [Flinders University of South Australia] at 03:31 12 October 2015 management information communicated to the market through earnings data (Wang, et al, 1993).…”