REIT Stock Splits and Market Efficiency

Posted: 22 Oct 2005

See all articles by William G. Hardin III

William G. Hardin III

Mississippi State University - Department of Finance and Economics

Kartono Liano

Mississippi State University - Department of Finance and Economics

Gow-Cheng Huang

Alabama State University - Department of Accounting and Finance

Abstract

An analysis of real estate investment trust (REIT) stock splits is presented. Evaluation of the initial reaction to split REITs supports efficient market pricing where REITs generate statistically significant positive announcement date returns, no statistically significant record date returns, and muted ex-date returns. In the long-term, split REITs do not consistently out perform benchmark portfolios over one-year, two-year, and three-year periods. REITs split subsequent to a substantial run up in stock price and to improve the position of their post split stock price relative to the stock price of the typical REIT.

Keywords: REITs, stock split, market efficiency, behavioral finance, long-term performance, short-term performance

Suggested Citation

Hardin, William and Liano, Kartono and Huang, Gow-Cheng, REIT Stock Splits and Market Efficiency. Journal of Real Estate Finance and Economics, Vol. 30, No. 3, 2005. Available at SSRN: https://ssrn.com/abstract=822351

William Hardin (Contact Author)

Mississippi State University - Department of Finance and Economics ( email )

P.O. Box 9580
Mississippi State, MS 39762
United States
601-325-7478 (Phone)
601-325-1977 (Fax)

Kartono Liano

Mississippi State University - Department of Finance and Economics ( email )

P.O. Box 9580
Mississippi State, MS 39762
United States
601-325-1981 (Phone)
601-325-1977 (Fax)

Gow-Cheng Huang

Alabama State University - Department of Accounting and Finance ( email )

P.O. Box 271
Montgomery, AL 36101-0271
United States
334-229-6920 (Phone)
334-265-0914 (Fax)

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