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Decomposing Industry Leverage: the Special Cases of Real Estate Investment Trusts and Technology & Hardware Companies
KTH, School of Architecture and the Built Environment (ABE), Real Estate and Construction Management, Real Estate Economics and Finance.ORCID iD: 0000-0002-3384-7166
Number of Authors: 3 (English)Manuscript (preprint) (Other academic)
Abstract [en]

Different industries exhibit significantly different leverage – companies in the REIT and technology/hardware sectors are extreme examples. The leverage ratio is twice as high with 50% for REITs as for non-real estate firms with around 25% in the U.S.; whereas the technology/hardware sector has the lowest ratio with around 17%. We theoretically and em­pirically analyse their differences. By decomposing the difference into three channels, we find that the industry-specific channel explains around 67% for REITs and 68% for technology/hard­ware firms; the value-based channel is mostly responsible for the remaining part. When taking non-linear influences of extreme values into account, the relevance of the industry-specific channel is considerably reduced.

Keywords [en]
capital structure; leverage ratio; real estate investment trust (REIT); technology, hardware, software, and equipment firms; coefficient-based difference; value-based difference; intercept-based difference decomposition model
National Category
Economics and Business
Identifiers
URN: urn:nbn:se:kth:diva-326027OAI: oai:DiVA.org:kth-326027DiVA, id: diva2:1752434
Available from: 2023-04-21 Created: 2023-04-21 Last updated: 2023-04-21Bibliographically approved

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fulltext(3407 kB)362 downloads
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File name FULLTEXT01.pdfFile size 3407 kBChecksum SHA-512
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Type fulltextMimetype application/pdf

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Steininger, Bertram I.

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CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf