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Full-Text Articles in Business
Does Board Independence Reduce The Cost Of Debt?, Michael Bradley, Dong Chen
Does Board Independence Reduce The Cost Of Debt?, Michael Bradley, Dong Chen
Faculty Scholarship
Using the passage of the Sarbanes-Oxley Act and the associated change in listing standards as a natural experiment, we find that while board independence decreases the cost of debt when credit conditions are strong or leverage low, it increases the cost of debt when credit conditions are poor or leverage high. We also document that independent directors set corporate policies that increase firm risk. These results suggest that, acting in the interest of shareholders, independent directors are increasingly costly to bondholders with the intensification of the agency conflict between these two stakeholders.
Interest Rate Risk Of Australian Reits: A Panel Analysis, Jaime L. Yong, Abhay Singh
Interest Rate Risk Of Australian Reits: A Panel Analysis, Jaime L. Yong, Abhay Singh
Research outputs 2014 to 2021
Management structures of many Australian REITs have shifted towards internal property management since 2001. Sector returns have been rewarding until the Global Financial Crisis, but rising costs of debt and years of aggressive borrowing have eroded REIT values. Externally managed trusts had relatively higher levels of debt than internally managed counterparts thus increasing the sensitivities to interest rate risks. Yet internally managed REITs engage in a wider set of operating activities which compound market and financial risks. This study uses panel and panel quantile regressions to examine the joint impact of financial leverage and management structure on REIT returns in …