Open Access. Powered by Scholars. Published by Universities.®
Articles 1 - 1 of 1
Full-Text Articles in Business
Political Risk And The Cost Of Capital In Asia-Pacific Property Markets, George D. Cashman, David M. Harrison, Hainan Sheng
Political Risk And The Cost Of Capital In Asia-Pacific Property Markets, George D. Cashman, David M. Harrison, Hainan Sheng
Finance Faculty Research and Publications
This study investigates the impact of political risk on the cost of capital for publicly traded real estate firms. More specifically, by using a sample of 102 REITs and listed property trusts, which hold nearly 6,000 distinct investment properties across the Asia-Pacific region, we find strong empirical evidence that increased exposure to political risk increases both the cost of equity financing of a firm and its weighted average cost of capital. Interestingly, no such linkages are apparent between political risk and the cost of debt of a firm. These empirical results are robust to a variety of alternative measures of …