Asset Specificity and the Ownership of Buildings

44 Pages Posted: 7 Sep 2013

See all articles by Jilnaught Wong

Jilnaught Wong

University of Auckland

Norman Wong

University of Auckland Business School

Debra C. Jeter

Vanderbilt University - Accounting

Multiple version iconThere are 2 versions of this paper

Date Written: 2013

Abstract

This paper examines the impact of asset specificity on firms’ decisions to own or lease their buildings. We present evidence that these decisions are primarily a function of efficiency concerns rather than opportunistic motives. We predict that firms requiring highly specific buildings in their operations are more likely to own, rather than to lease, their buildings, and we provide empirical evidence that supports our prediction, after controlling for potential opportunism. Our findings provide rare large-sample evidence consistent with a theoretical link between asset specificity and asset ownership as argued in the literature on economic organization.

Keywords: Asset ownership, Asset specificity, Buildings, Economic organization, Efficiency versus opportunism, Off-balance-sheet financing, Ownership versus leasing, Organizational decision making, Organizational form

Suggested Citation

Wong, Jilnaught and Wong, Norman and Jeter, Debra C., Asset Specificity and the Ownership of Buildings (2013). Vanderbilt Owen Graduate School of Management Research Paper No. 2321724. Available at SSRN: https://ssrn.com/abstract=2321724 or http://dx.doi.org/10.2139/ssrn.2321724

Jilnaught Wong (Contact Author)

University of Auckland ( email )

Private Bag 92019
Room: 210/328
Auckland
New Zealand
(64 9) 3737599 Ext. 8528 (Phone)
(64) 9 373-7406 (Fax)

Norman Wong

University of Auckland Business School ( email )

Private Bag 92019
Auckland, 1001
New Zealand
(64 9) 3737599 Ext. 87098 (Phone)
(64 9) 373 7406 (Fax)

HOME PAGE: http://www.business.auckland.ac.nz

Debra C. Jeter

Vanderbilt University - Accounting ( email )

Nashville, TN 37203
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
50
Abstract Views
415
PlumX Metrics