The Determinants of International Commercial Real Estate Investment
Posted: 1 May 2014
Date Written: April 29, 2014
We examine the determinants of international commercial real estate investment using a unique set of panel data series for 47 countries worldwide, covering the period from 2000 to 2009. We explore how different socio-economic, demographic and institutional characteristics affect commercial real estate investment activity by determining both cross-sectional and time-series estimators, running augmented random effect panel regressions. We provide evidence that economic growth, rapid urbanization and compelling demographics attract real estate investment, and also demonstrate that a lack of transparency in the legal framework, administrative burdens of doing real estate business, socio-cultural challenges and political instabilities reduce international real estate allocations.
Keywords: Real estate investment; International Asset Allocation; Real estate market attractiveness; Augmented random effect panel regression
JEL Classification: C33, C23, G11, G23, G24, O16, O18, P25, P52
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