IDEAS home Printed from https://ideas.repec.org/a/taf/repmxx/v26y2020i1p101-109.html

Some searches may not work properly. We apologize for the inconvenience.

   My bibliography  Save this article

REIT Spreads Around Dividend Cuts and Suspensions During the Financial Crisis

Author

Listed:
  • Olgun F. Sahin
  • Pattarake Sarajoti
  • Alireza Nasseh

Abstract

We examine bid-ask spreads, depths, and adverse selection components of bid-ask spreads for REITs announcing dividend cuts or suspensions before, during, and after the 2008 financial crisis. We compare measures of spread, market depth, and adverse selection components of bid-ask spreads across time periods and between event and non-event REITs. We find that on announcement days of dividend cuts and suspensions, bid-ask spreads of event REITs are narrower and market depths are larger than that of non-event REITs during and after the financial crisis periods. These findings suggest improved liquidity of REIT shares on announcement days of dividend events. We do not find any significant change in adverse selection components of bid-ask spreads. Our results regarding improved liquidity during the financial crisis period are consistent with Calomiris and Wilson. Calomiris and Wilson report that during the capital crunch in the 1930s, banks facing wider bid-ask spreads used dividend cuts as a way to preserve capital to avoid selling equity in a low-liquidity or high-transaction cost environment (wider bid-ask spread).

Suggested Citation

  • Olgun F. Sahin & Pattarake Sarajoti & Alireza Nasseh, 2020. "REIT Spreads Around Dividend Cuts and Suspensions During the Financial Crisis," Journal of Real Estate Portfolio Management, Taylor & Francis Journals, vol. 26(1), pages 101-109, October.
    • Handle: RePEc:taf:repmxx:v:26:y:2020:i:1:p:101-109
    DOI: 10.1080/10835547.2020.1828723
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/10835547.2020.1828723
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/10835547.2020.1828723?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    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:taf:repmxx:v:26:y:2020:i:1:p:101-109. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/repm20 .

    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.