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Determinants Of Capital Structure Of A-Reits And The Global Financial Crisis

Zarebski, Paul and Dimovski, Bill (2012) Determinants Of Capital Structure Of A-Reits And The Global Financial Crisis. Pacific Rim Property Research Journal, 18 (1). pp. 3-19. ISSN 1444-5921 (print) 1444-8921 (online)

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This paper contributes to the capital structure literature by investigating the determinants of capital structure of Australian Real Estate Investment Trusts (A-REITs) over the period 2006-2009. By using a panel approach and a Global Financial Crisis (GFC) dummy variable, our analysis incorporates the Global Financial Crisis (GFC) shock which appears to have affected the market after December 2007. We find that A-REIT size, profitability, tangibility, operating risk and number of growth opportunities impact similarly to many previous studies of international entities upon the degree of leverage. We also find mixed support for prevailing capital structure theories of Pecking Order, Trade-off and Agency Theory, but find that Market Timing Theory can be rejected over our sample period. With specific focus after onset of the GFC, we find that the relationship between capital structure and our independent variables is somewhat distorted. Consequently, the postulations of theory also become distorted whereby changes to capital structure come about because of the primary goal to survive, rather than managerial opportunism.

Item Type: Article
Uncontrolled Keywords: ResPubID25772, A-REIT, Australia, capital structure, global financial crisis
Subjects: FOR Classification > 1502 Banking, Finance and Investment
Faculty/School/Research Centre/Department > College of Business
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Depositing User: Yimin Zeng
Date Deposited: 09 Apr 2014 04:44
Last Modified: 22 Sep 2014 05:36
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Citations in Scopus: 10 - View on Scopus

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