Managerial Style and Firm Value
نویسندگان
چکیده
This study analyzes the effect of managerial style on firm value by partitioning general and administrative (G&A) expenses in the REIT industry into a nondiscretionary “structural” component associated with the costs of asset and liability management and a discretionary or “style” component. The discretionary component is significantly related to at least one measure of stylespecifically, the portfolio focus/diversification of the firm. Gross (project-level) cash flows are invariant to the non-discretionary or structural component of G&A but are positively related to the style component of G&A. The structural component has a negative impact on share price while the style component has a neutral impact. We conclude that, for this industry, creating larger, less-levered firms would result in enhanced value.
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