Three Essays on Corporate Governance: Insights from REITs

Date of Completion

January 2011


Economics, Finance




This dissertation consists of three essays examining issues related to REITs, seasoned equity offerings, dividend policy and corporate governance. In the first essay we examine the operating performance of REITs following seasoned equity offerings. We find evidence of mean reversion in operating performance and timing by issuing firms, and that information asymmetry plays an important role in the results. ^ In the second essay, we examine the dividend policy of REITs and the relationship between dividend policy and abnormal stock returns around offering dates of seasoned equity issues. We find evidence that dividend payments in excess of the mandatory payments are related to the ownership of shares by the CEO and the presence of blockholders for REITs issuing seasoned equity. We also find that REITs with higher dividend payments have smaller declines in their stock prices around offering dates of new issues compared to REITs with lower payments. ^ In the third essay, we examine the prior research on corporate governance of firms in general and REITs in general and synthesize the findings. We pay special attention to studies on REIT governance and attempt to shed light on the question as to whether governance matters for regulated industries, where managerial discretion is limited and the possibility of wasteful activities is diminished. In addition, we study the evolution of institutional ownership of REITs and its relation to corporate governance over time. ^