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Does A Firm's Entry or Exit Affect Competitors’ Value? Evidence from the REIT Industry
Author(s) -
Chan Su Han,
Chen Jiajin,
Wang Ko
Publication year - 2018
Publication title -
real estate economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.064
H-Index - 61
eISSN - 1540-6229
pISSN - 1080-8620
DOI - 10.1111/1540-6229.12240
Subject(s) - real estate investment trust , competitor analysis , economics , monetary economics , real estate , financial economics , stock (firearms) , asset (computer security) , affect (linguistics) , business , finance , mechanical engineering , linguistics , philosophy , computer security , management , computer science , engineering
We analyze 483 entry and 439 exit events of publicly traded real estate investment trusts (REITs) and find that changes in the number of REITs in the market affect rival REITs’ stock performance. We also partition the sample by the modes of entries and exits as well as by REIT asset type in order to disentangle alternative explanations. Overall, our evidence indicates that the supply effect still matters for stock prices even after considering signaling and price pressure explanations.