Managerial Style and Firm Value
This study analyzes the effect of managerial style on firm value by partitioning general and administrative (G&A) expenses in the real estate investment trust industry into a nondiscretionary "structural" component associated with the costs of asset and liability management and a discretionary or "style" component. The discretionary component is significantly related to at least one measure of style-specifically, the portfolio focus/diversification of the firm. Gross (project-level) cash flows are invariant to the nondiscretionary or structural component of G&A but are positively related to the style component of G&A. The structural component has a negative impact on share price while the style component has a neutral impact. Therefore, for this industry, creating larger, less-levered firms would result in enhanced value. Copyright American Real Estate and Urban Economics Association.
Year of publication: |
1998
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Authors: | Capozza, Dennis R. ; Seguin, Paul J. |
Published in: |
Real Estate Economics. - American Real Estate and Urban Economics Association - AREUEA. - Vol. 26.1998, 1, p. 131-150
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Publisher: |
American Real Estate and Urban Economics Association - AREUEA |
Saved in:
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