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The Wealth Effects of Domestic vs International Joint Ventures: The Case of Real Estate

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Author Info
Ling T. He (Department of Economics & Finance Christopher Newport University Newport News, Virginia 23606)
F.C. Neil Myer () (Department of Finance James J. Nance College of Business Administration Cleveland State University Cleveland, Ohio 44114)
James R. Webb () (Department of Finance James J. Nance College of Business Administration Cleveland State University Cleveland, Ohio 44114)
Abstract

This study examines the wealth effect of international versus domestic real estate joint ventures on the U.S. participating firm's shareholders. This is done using traditional even study methodology for real estate joint venture announcements. The results suggest that domestic real estate joint ventures generally result in a significant increase in the firm's value, while international real estate joint ventures usually have a much less significant to nonsignificant wealth impact. This may be due to the immovability of real properties in foreign countries and the large amount of initial investment in real estate that increase both political and economic risks for international real estate joint ventures. This study also finds that hotel joint ventures generally have a weaker wealth effect than non-hotel real estate joint ventures.

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File URL: http://aux.zicklin.baruch.cuny.edu/jrer/papers/pdf/past/vol13n03/v13p349.pdf
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Publisher Info
Article provided by American Real Estate Society in its journal Journal of Real Estate Research.

Volume (Year): 13 (1997)
Issue (Month): 3 ()
Pages: 349-358
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Handle: RePEc:jre:issued:v:13:n:3:1997:p:349-358

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Postal: American Real Estate Society Clemson University School of Business & Behavioral Science Department of Finance 401 Sirrine Hall Clemson, SC 29634-1323
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Postal: Diane Quarles American Real Estate Society Manager of Member Services Clemson University Box 341323 Clemson, SC 29634-1323
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L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Brown, Stephen J. & Warner, Jerold B., 1985. "Using daily stock returns : The case of event studies," Journal of Financial Economics, Elsevier, vol. 14(1), pages 3-31, March. [Downloadable!] (restricted)
  2. Scholes, Myron S & Wolfson, Mark A, 1990. "The Effects of Changes in Tax Laws on Corporate Reorganization Activity," Journal of Business, University of Chicago Press, vol. 63(1), pages S141-64, January. [Downloadable!] (restricted)
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  3. Claire Crutchley & Enyang Guo & Robert S. Hansen, 1991. "Stockholder Benefits From Japanese-U.S. Joint Ventures," Financial Management, Financial Management Association, vol. 20(4), Winter.
  4. Fayez A. Elayan, 1993. "The Announcement Effect of Real Estate Joint Ventures on Returns to Stockholders: An Empirical Investigation," Journal of Real Estate Research, American Real Estate Society, vol. 8(1), pages 13-26. [Downloadable!]
  5. Lee, Insup & Wyatt, Steve B, 1990. "The Effects of International Joint Ventures on Shareholder Wealth," The Financial Review, Eastern Finance Association, vol. 25(4), pages 641-49, November.
  6. Darrough, Masako N & Stoughton, Neal M, 1989. "A Bargaining Approach to Profit Sharing in Joint Ventures," Journal of Business, University of Chicago Press, vol. 62(2), pages 237-70, April. [Downloadable!] (restricted)
  7. McConnell, John J & Nantell, Timothy J, 1985. " Corporate Combinations and Common Stock Returns: The Case of Joint Ventures," Journal of Finance, American Finance Association, vol. 40(2), pages 519-36, June. [Downloadable!] (restricted)
  8. R. Ravichandran & J. Sa-Aadu, 1988. "Resource Combination and Security Price Reactions: The Case of Real Estate Joint Ventures," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 16(2), pages 105-122. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Robert Campbell & Nancy White-Huckins & C. Sirmans, 2006. "Domestic and International Equity REIT Joint Ventures: Structuring Corporate Options," The Journal of Real Estate Finance and Economics, Springer, vol. 32(3), pages 275-288, May. [Downloadable!] (restricted)
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