Corporate Transparency and Firm Growth: Evidence from Real Estate Investment Trusts

26 Pages Posted: 17 Aug 2011

See all articles by Heng An

Heng An

University of North Carolina (UNC) at Greensboro - Department of Accounting and Finance

Douglas O. Cook

University of Alabama - Culverhouse College of Commerce & Business Administration

Leonard V. Zumpano

University of Alabama - Department of Economics, Finance and Legal Studies

Date Written: Fall 2011

Abstract

Using a panel data set of Real Estate Investment Trusts (REITs), we find corporate transparency to be positively associated with REIT growth. These results suggest that greater transparency facilitates firm growth by relaxing informationā€based constraints on external financing. The magnitude of this effect is larger in the equity market than in the debt market. Moreover, the sensitivity of investment to cash flows is decreasing in transparency, evidence that transparency relaxes liquidity constraints. Finally, we find more transparent REITs are less likely to crash.

Suggested Citation

An, Heng and Cook, Douglas O. and Zumpano, Leonard Vincent, Corporate Transparency and Firm Growth: Evidence from Real Estate Investment Trusts (Fall 2011). Real Estate Economics, Vol. 39, Issue 3, pp. 429-454, 2011, Available at SSRN: https://ssrn.com/abstract=1911061 or http://dx.doi.org/10.1111/j.1540-6229.2010.00299.x

Heng An (Contact Author)

University of North Carolina (UNC) at Greensboro - Department of Accounting and Finance ( email )

Bryan School of Business and Economics
Greensboro, NC 27412
United States

Douglas O. Cook

University of Alabama - Culverhouse College of Commerce & Business Administration ( email )

Culverhouse College of Business
Tuscaloosa, AL 35487-0223
United States
205-348-8971 (Phone)
205-348-0590 (Fax)

Leonard Vincent Zumpano

University of Alabama - Department of Economics, Finance and Legal Studies ( email )

P.O. Box 870244
Tuscaloosa, AL 35487
United States
205-348-8988 (Phone)
205-348-0590 (Fax)

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