Advisor Choice in Asia-Pacific Property Markets

50 Pages Posted: 28 Dec 2012

See all articles by George D. Cashman

George D. Cashman

Marquette University; Texas Tech University

David M. Harrison

UCF; Texas Tech University

Michael Seiler

College of William and Mary - Finance

Multiple version iconThere are 2 versions of this paper

Date Written: September 27, 2012


This paper examines advisor choice decisions by publicly traded REITs and listed property companies in Asia-Pacific real estate markets. Using a sample of 168 firms, we find robust evidence that firms strategically evaluate and compare the increased agency costs associated with external advisement against the potential benefits associated with collocating decision rights with location specific soft information. Our empirical results reveal real estate companies tend to hire external advisors when they invest in countries: 1) that are more economically and politically unstable, 2) whose legal system is based on civil law, 3) where the level of corruption is perceived to be high, and 4) when disclosure is relatively poor. Additionally, we find the probability of retaining an external advisor is directly related to the expected agency costs. Lastly, we find evidence of return premiums in excess of 13% for firms whose organizational structure matches their investment profile. As such, we conclude that the decision to hire an external advisor represents a value relevant trade-off between the costs and benefits of this organizational arrangement.

Keywords: REITs, Advisor Choice, International Real Estate, Soft Information

Suggested Citation

Cashman, George D. and Harrison, David M. and Seiler, Michael, Advisor Choice in Asia-Pacific Property Markets (September 27, 2012). Journal of Real Estate Finance and Economics, Forthcoming. Available at SSRN:

George D. Cashman

Marquette University ( email )

College of Business Administration
P.O. Box 1881
Milwaukee, WI 53201-1881
United States
4142881448 (Phone)

Texas Tech University ( email )

2500 Broadway
Lubbock, TX 79409
United States

David M. Harrison

UCF ( email )

Orlando, FL 32816-1400
United States
407-823-1127 (Phone)

Texas Tech University ( email )

2500 Broadway
Lubbock, TX 79409
United States

Michael Seiler (Contact Author)

College of William and Mary - Finance ( email )

United States


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