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The Information Content of REIT Credit Rating Actions and Transparency

Author

Listed:
  • Alan Tidwell

    (Columbus State University)

  • Alan Ziobrowski

    (Georgia State University)

  • Paul Gallimore

    (University of Reading)

  • SeungHan Ro

    (Konkuk University)

Abstract

We examine the short-run and long-run price reaction of equity real estate investment trust (REIT) shares following credit rating actions, testing the transparency of the REIT structure. Generally, the economic effect on the stock price is subdued for both upgrades and downgrades compared to prior literature examining the broader U.S. equity market. An examination of trading volume revealed a significant increase in trading in reaction to downgrade credit rating changes, with a more subdued response to upgrades. The findings support the notion that REITs are more publicly forthcoming about the expectation of positive news in comparison to negative news.

Suggested Citation

  • Alan Tidwell & Alan Ziobrowski & Paul Gallimore & SeungHan Ro, 2013. "The Information Content of REIT Credit Rating Actions and Transparency," Journal of Real Estate Research, American Real Estate Society, vol. 35(3), pages 365-392.
    • Handle: RePEc:jre:issued:v:35:n:3:2013:p:365-392
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    Citations

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    Cited by:

    1. Patrycja Chodnicka – Jaworska & Piotr Jaworski, 2019. "The Chinese and The Big Three Credit Rating Agencies – their impact on stock prices," Faculty of Management Working Paper Series 22019, University of Warsaw, Faculty of Management.
    2. Jianfu Shen & Kwong Wing Chau, 2022. "The Effect of Access to the Public Debt Market on Corporate Financing Decisions: The Case of REITs," Sustainability, MDPI, vol. 14(13), pages 1-19, June.

    More about this item

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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