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Debt flexibility and investment - evidence from European listed real estate companies

Author

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  • Alexey Zhukovskiy
  • Ranoua Bouchouicha
  • Heidi Falkenbach

Abstract

In this paper we examine the relationship between debt flexibility and investment. Employing a hand-collected sample of debt structures of 102 European public real estate companies, we construct measures of the companies’ ability to substitute bank loans with other forms of debt. Our results show that there is a statistically and economically significant effect of debt flexibility on the investment activity of European listed real estate companies, the effect increasing during times of tight bank lending constraints. We confirm that the effect is linked to the debt structure, rather than the general degree of indebtness (leverage) of the company and robust to alternative specifications and to controlling for the institutional differences between countries.

Suggested Citation

  • Alexey Zhukovskiy & Ranoua Bouchouicha & Heidi Falkenbach, 2019. "Debt flexibility and investment - evidence from European listed real estate companies," ERES eres2019_105, European Real Estate Society (ERES).
    • Handle: RePEc:arz:wpaper:eres2019_105
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    File URL: https://eres.architexturez.net/doc/oai-eres-id-eres2019-105
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    More about this item

    Keywords

    debt flexibility; debt stucture; Investment; public real estate; REIT;
    All these keywords.

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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