Corruption and Home Bias in Global Real Estate Investments

63 Pages Posted: 29 Jul 2017 Last revised: 4 Aug 2017

See all articles by Tien Foo Sing

Tien Foo Sing

National University of Singapore (NUS) - Department of Real Estate

Long Wang

ShanghaiTech University

Date Written: July 28, 2017

Abstract

This study affirms the negative relationship between corruption and real estate investment flows using a comprehensive set of cross-border commercial real estate investment data from 2001 to 2014. We find non-information explanations for foreign investments in corrupt countries. Foreign investments in corrupt markets are highly diversified by investor type and property type, and are independent of geographical proximity. Large foreign countries account for only a small fraction of foreign real estate investment in corrupt countries. Foreign investors form joint ventures to mitigate corruption risks. They hold real estate for a shorter period and earn lower returns in corrupt countries.

Keywords: Corruption, Home Bias, Foreign Investors, Commercial Real Estate Investments, Information Asymmetry, Manager Abilities

JEL Classification: D82, G11, G15, F21

Suggested Citation

Sing, Tien Foo and Wang, Long, Corruption and Home Bias in Global Real Estate Investments (July 28, 2017). Available at SSRN: https://ssrn.com/abstract=3010082 or http://dx.doi.org/10.2139/ssrn.3010082

Tien Foo Sing (Contact Author)

National University of Singapore (NUS) - Department of Real Estate ( email )

4 Architecture Drive
Singapore 117566
Singapore

Long Wang

ShanghaiTech University ( email )

100 Haike Rd
100 Haike Rd
Pudong Xinqu, AZ Shanghai 210201
China

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
106
Abstract Views
584
rank
325,803
PlumX Metrics