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| The Wealth Effects of Domestic vs
International Joint Ventures: The Case of Real Estate Author: Ling T. He, F.C. Neil Myer, and James R. Webb Start Page: 349 Abstract: This study examines
the wealth effect of international versus domestic real estate joint ventures on the U.S.
participating firm's shareholders. This is done using traditional even study methodology
for real estate joint venture announcements. The results suggest that domestic real estate
joint ventures generally result in a significant increase in the firm's value, while
international real estate joint ventures usually have a much less significant to
nonsignificant wealth impact. This may be due to the immovability of real properties in
foreign countries and the large amount of initial investment in real estate that increase
both political and economic risks for international real estate joint ventures. This study
also finds that hotel joint ventures generally have a weaker wealth effect than non-hotel
real estate joint ventures. |
