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- Title
Corporate Governance and Collateral Effect of Real Estate.
- Authors
Daxuan Zhao
- Abstract
The collateral channel literature predicts that soaring real estate prices increase the debt capacity of firms with more real estate asset holdings. This paper discusses the different relationships between collateral and investment. We find that firms with strong corporate governance were more likely to increase debt capacity via the collateral channel during the real estate boom from 1993 to 2006. Entrenched managers used less debt to finance their investments when their real estate collateral values increased. Our results hold even after controlling for noncollateralized debts and credit rating of the sample firms.
- Subjects
REAL property; CORPORATE governance; COLLATERAL security; GLIDING &; soaring; PRICE increases; CREDIT ratings
- Publication
International Real Estate Review, 2024, Vol 27, Issue 1, p114
- ISSN
1029-6131
- Publication type
Article
- DOI
10.53383/100378