IDEAS home Printed from https://ideas.repec.org/a/jre/issued/v6n21991p169-178.html
   My bibliography  Save this article

A Test for Tax-Induced Investor Clienteles in Real Estate Investment Trusts

Author

Abstract

Stock price changes on ex-dividend dates are examined to estimate the marginal tax rate of shareholders of common stock in mortgage and equity real estate investment trusts. The stocks are classified on the basis of the dividend yield of the shares and the financial leverage of the underlying REITs, and the mean marginal tax rate of each class of stock is estimated. Results are consistent with tax-induced investor clienteles related to the dividend yield of REITs, both before and after the Tax Reform Act of 1986. Results do not support tax-induced investor clienteles with respect to financial leverage of REITs.

Suggested Citation

  • Brian Maris & Fayez Elayan, 1991. "A Test for Tax-Induced Investor Clienteles in Real Estate Investment Trusts," Journal of Real Estate Research, American Real Estate Society, vol. 6(2), pages 169-178.
    • Handle: RePEc:jre:issued:v:6:n:2:1991:p:169-178
    as

    Download full text from publisher

    File URL: http://pages.jh.edu/jrer/papers/pdf/past/vol06n02/v06p169.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Eades, Kenneth M. & Hess, Patrick J. & Kim, E. Han, 1984. "On interpreting security returns during the ex-dividend period," Journal of Financial Economics, Elsevier, vol. 13(1), pages 3-34, March.
    2. Harris, John M, Jr & Roenfeldt, Rodney L & Cooley, Philip L, 1983. "Evidence of Financial Leverage Clienteles," Journal of Finance, American Finance Association, vol. 38(4), pages 1125-1132, September.
    3. Elton, Edwin J & Gruber, Martin J, 1970. "Marginal Stockholder Tax Rates and the Clientele Effect," The Review of Economics and Statistics, MIT Press, vol. 52(1), pages 68-74, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jean-Marie Gagnon & Jean-Marc Suret, 1991. "Ex-Dividend Day Price Changes And Implied Tax Rates: An Evaluation," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 14(3), pages 255-262, September.
    2. Clemens Sialm, 2009. "Tax Changes and Asset Pricing," American Economic Review, American Economic Association, vol. 99(4), pages 1356-1383, September.
    3. Dupuis, Daniel, 2019. "Ex-dividend day price behavior and liquidity in a tax-free emerging market," Emerging Markets Review, Elsevier, vol. 38(C), pages 239-250.
    4. Sorjonen, Pasi, 2002. "Ex-Dividend Day Behavior of Stock Prices in Finland in 1989-90 and 1993-97," Discussion Papers 674, The Research Institute of the Finnish Economy.
    5. Bell, L. & Jenkinson, T., 2000. "New Evidence of the Impact of Dividend Taxation and on the Identity of the Marginal Investor," Economics Series Working Papers 9924, University of Oxford, Department of Economics.
    6. David J. Beggs & Christopher L. Skeels, 2006. "Market Arbitrage of Cash Dividends and Franking Credits," The Economic Record, The Economic Society of Australia, vol. 82(258), pages 239-252, September.
    7. Randall Morck, 2003. "Why Some Double Taxation Might Make Sense: The Special Case of Inter-corporate Dividends," NBER Working Papers 9651, National Bureau of Economic Research, Inc.
    8. Florentsen, Bjarne & Rydqvist, Kristian, 2002. "Ex-Day Behavior When Investors and Professional Traders Assume Reverse Roles: The Case of Danish Lottery Bonds," Journal of Financial Intermediation, Elsevier, vol. 11(2), pages 152-175, April.
    9. Jeff Whitworth & Ramesh P. Rao, 2010. "Do Tax Law Changes Influence Ex‐Dividend Stock Price Behavior? Evidence from 1926 to 2005," Financial Management, Financial Management Association International, vol. 39(1), pages 419-445, March.
    10. Jeff Whitworth & David A. Carter, 2010. "The Ex‐Day Price Behavior of REITs: Taxes or Ticks?," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 38(4), pages 733-752, Winter.
    11. Philip Brown & Alex Clarke, 1993. "The Ex-Dividend Day Behaviour of Australian Share Prices Before and After Dividend Imputation," Australian Journal of Management, Australian School of Business, vol. 18(1), pages 1-40, June.
    12. Al-Yahyaee, Khamis Hamed, 2013. "The effect of a reduction in price discreteness on ex-day stock returns in a unique environment," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 23(C), pages 283-294.
    13. Lynn Hodgkinson & Kevin Holland & Richard Jackson, 2006. "Dividend valuation, trading and transactions costs: the 1997 partial abolition of dividend tax credit repayments," Accounting and Business Research, Taylor & Francis Journals, vol. 36(4), pages 253-270.
    14. Shishir Paudel & Sabatino (Dino) Silveri & Mark Wu, 2020. "Nasdaq ex‐day behavior: An out‐of‐sample test," Review of Financial Economics, John Wiley & Sons, vol. 38(2), pages 405-420, April.
    15. Raj Chetty & Joseph Rosenberg & Emmanuel Saez, 2005. "The Effects of Taxes on Market Responses to Dividend Announcements and Payments: What Can we Learn from the 2003 Dividend Tax Cut?," NBER Working Papers 11452, National Bureau of Economic Research, Inc.
    16. Clemens Sialm, 2005. "Tax Changes and Asset Pricing: Time-Series Evidence," NBER Working Papers 11756, National Bureau of Economic Research, Inc.
    17. Trevor S. Harris & R. Glenn Hubbard & Deen Kemsley, 1999. "The Share Price Effects of Dividend Taxes and Tax Imputation Credits," NBER Working Papers 7445, National Bureau of Economic Research, Inc.
    18. Manuel Espitia & Francisco-Javier Ruiz, 1997. "Ex—dividend day stock price falls on the Spanish stock market," Applied Financial Economics, Taylor & Francis Journals, vol. 7(5), pages 481-492.
    19. Jan Bartholdy & Kate Brown, 2004. "Testing for Multiple Types of Marginal Investor in Ex-Day Pricing," Multinational Finance Journal, Multinational Finance Journal, vol. 8(3-4), pages 173-209, september.
    20. Green, Richard C. & Rydqvist, Kristian, 1999. "Ex-day behavior with dividend preference and limitations to short-term arbitrage: the case of Swedish lottery bonds," Journal of Financial Economics, Elsevier, vol. 53(2), pages 145-187, August.

    More about this item

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jre:issued:v:6:n:2:1991:p:169-178. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: JRER Graduate Assistant/Webmaster (email available below). General contact details of provider: http://www.aresnet.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.