The Wealth Effects of Sale and Leasebacks: New Evidence
This paper investigates the phenomenon of sale and leasebacks as one way in which firms may use financial contracts to rearrange their organizational architecture. A theoretic model links the length of initial leaseback period to incentives to make noncontractible future investments in the lease relationship and predicts that firms choose shorter leases when landlords make relatively important investments. Using a sample of 71 sale and leaseback events from the 1990s, we document a significant mean abnormal return of 1.3% for shareholders of seller/lessee firms announcing relatively short leasebacks. The evidence suggests that firms may use sale and leasebacks to optimize their claims to real estate. Copyright 2004 by the American Real Estate and Urban Economics Association
Volume (Year): 32 (2004)
Issue (Month): 4 (December)
|Contact details of provider:|| Postal: |
Phone: (812) 855-7794
Fax: (812) 855-8679
Web page: http://www.blackwellpublishing.com/journal.asp?ref=1080-8620
More information through EDIRC
|Order Information:||Web: http://www.blackwellpublishing.com/subs.asp?ref=1080-8620|
When requesting a correction, please mention this item's handle: RePEc:bla:reesec:v:32:y:2004:i:4:p:619-643. See general information about how to correct material in RePEc.
If references are entirely missing, you can add them using this form.