IDEAS home Printed from https://ideas.repec.org/a/ire/issued/v25n032022p371-399.html
   My bibliography  Save this article

Enduring Crises: The Link Between Corporate Real Estate and Economic Policy Uncertainty

Author

Listed:
  • Alistair Drew Ingham

    (National University of Singapore)

Abstract

This article examines the relationship between corporate real estate (CRE) and economic policy uncertainty (EPU), and how this relationship may aid companies in their decision-making, which form the impetus for this research. Multiple linear regressions are conducted to analyse corporate-level financial performance, using return on assets and market price as indicators, with regard to macroeconomic indicators such as gross domestic product (GDP) growth, inflation, and EPU. A vector error correction model is also used to ascertain the short- and long-term dynamics at play. The results reveal a statistically significant impact by both CRE and EPU on financial performance, as well as a significant interaction between the two variables. This novel estimate affirms that there is indeed a link between CRE held and financial performance during times of economic uncertainty. This article also establishes a link between CRE ownership and company sector, and explores the relationship between the maturity and ownership concentration of companies, with reference to the CRE held, thus providing the basis to show the different decision-making processes of companies at different stages of their lifecycle, and in different sectors.

Suggested Citation

  • Alistair Drew Ingham, 2022. "Enduring Crises: The Link Between Corporate Real Estate and Economic Policy Uncertainty," International Real Estate Review, Global Social Science Institute, vol. 25(3), pages 371-399.
    • Handle: RePEc:ire:issued:v:25:n:03:2022:p:371-399
    as

    Download full text from publisher

    File URL: http://www.gssinst.org/irer/wp-content/uploads/2022/10/v25-no3-4_Enduring-Crises-The-Link-Between-Corporate-Real-Estate-and-Economic-Policy-Uncertainty.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Hassett, Kevin A & Metcalf, Gilbert E, 1999. "Investment with Uncertain Tax Policy: Does Random Tax Policy Discourage Investment?," Economic Journal, Royal Economic Society, vol. 109(457), pages 372-393, July.
    2. Thomas Chaney & David Sraer & David Thesmar, 2012. "The Collateral Channel: How Real Estate Shocks Affect Corporate Investment," American Economic Review, American Economic Association, vol. 102(6), pages 2381-2409, October.
    3. Ben S. Bernanke, 1983. "Irreversibility, Uncertainty, and Cyclical Investment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 98(1), pages 85-106.
    4. repec:hal:spmain:info:hdl:2441/75koqefued8i7pihbrl9u84p4u is not listed on IDEAS
    5. Kevin A. Hassett, 1999. "Tax Policy and Investment," Books, American Enterprise Institute, number 53049, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Handley, Kyle, 2014. "Exporting under trade policy uncertainty: Theory and evidence," Journal of International Economics, Elsevier, vol. 94(1), pages 50-66.
    2. Paraskevi Salamaliki, 2015. "Economic Policy Uncertainty and Economic Activity: A Focus on Infrequent Structural Shifts," Working Paper Series of the Department of Economics, University of Konstanz 2015-08, Department of Economics, University of Konstanz.
    3. Jeffrey Clemens & Stan Veuger, 2015. "Risks to the Returns to Medical Innovation: The Case of Myriad Genetics," NBER Working Papers 21469, National Bureau of Economic Research, Inc.
    4. Jeffrey Clemens & Stan Veuger, 2017. "Risks To The Returns To Medical Innovation: The Case Of Myriad Genetics," Contemporary Economic Policy, Western Economic Association International, vol. 35(2), pages 345-357, April.
    5. Hua Cheng & Kishore Gawande & Steven Ongena & Shusen Qi, 2020. "Get beyond policy uncertainty: Evidence from political connections," Swiss Finance Institute Research Paper Series 20-77, Swiss Finance Institute.
    6. Lubos Pástor & Pietro Veronesi, 2012. "Uncertainty about Government Policy and Stock Prices," Journal of Finance, American Finance Association, vol. 67(4), pages 1219-1264, August.
    7. Kang, Wensheng & Lee, Kiseok & Ratti, Ronald A., 2014. "Economic policy uncertainty and firm-level investment," Journal of Macroeconomics, Elsevier, vol. 39(PA), pages 42-53.
    8. Györfy Lehel & Madaras Szilárd, 2019. "The Influence of Self-Employment on Early-Stage Entrepreneurship in Romania. A Global Entrepreneurship Monitor-Based Analysis," Acta Universitatis Sapientiae, Economics and Business, Sciendo, vol. 7(1), pages 23-35, December.
    9. Dibiasi, Andreas & Abberger, Klaus & Siegenthaler, Michael & Sturm, Jan-Egbert, 2018. "The effects of policy uncertainty on investment: Evidence from the unexpected acceptance of a far-reaching referendum in Switzerland," European Economic Review, Elsevier, vol. 104(C), pages 38-67.
    10. Ozili, Peterson Kitakogelu, 2021. "Economic policy uncertainty in banking: a literature review," MPRA Paper 108017, University Library of Munich, Germany.
    11. Apergis, Nicholas, 2015. "Policy risks, technological risks and stock returns: New evidence from the US stock market," Economic Modelling, Elsevier, vol. 51(C), pages 359-365.
    12. Chan, Kam Fong & Gray, Philip & Gray, Stephen & Zhong, Angel, 2020. "Political uncertainty, market anomalies and Presidential honeymoons," Journal of Banking & Finance, Elsevier, vol. 113(C).
    13. Laura A. Wellman, 2017. "Mitigating political uncertainty," Review of Accounting Studies, Springer, vol. 22(1), pages 217-250, March.
    14. Nina Biljanovska & Francesco Grigoli & Martina Hengge, 2021. "Fear thy neighbor: Spillovers from economic policy uncertainty," Review of International Economics, Wiley Blackwell, vol. 29(2), pages 409-438, May.
    15. Muhammad Shahbaz & Arshian Sharif & Fateh Belaid & Xuan Vinh Vo, 2023. "Long‐run co‐variability between oil prices and economic policy uncertainty," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(2), pages 1308-1326, April.
    16. Panteghini Paolo, 2001. "On Corporate Tax Asymmetries and Neutrality," German Economic Review, De Gruyter, vol. 2(3), pages 269-286, August.
    17. La-Bhus Fah Jirasavetakul & Mr. Antonio Spilimbergo, 2018. "Economic Policy Uncertainty in Turkey," IMF Working Papers 2018/272, International Monetary Fund.
    18. Fedorova, Elena & Ledyaeva, Svetlana & Drogovoz, Pavel & Nevredinov, Alexandr, 2022. "Economic policy uncertainty and bankruptcy filings," International Review of Financial Analysis, Elsevier, vol. 82(C).
    19. Kyle Handley & Nuno Limão, 2018. "Trade and Investment under Policy Uncertainty: Theory and Firm Evidence," World Scientific Book Chapters, in: Policy Externalities and International Trade Agreements, chapter 4, pages 89-122, World Scientific Publishing Co. Pte. Ltd..
    20. Xu, Zhaoxia, 2020. "Economic policy uncertainty, cost of capital, and corporate innovation," Journal of Banking & Finance, Elsevier, vol. 111(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ire:issued:v:25:n:03:2022:p:371-399. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: IRER Graduate Assistant/Webmaster (email available below). General contact details of provider: https://www.gssinst.org/gssinst/index.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.