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The determinants of international commercial real estate investments

Author

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  • Lieser, Karsten

    (IESE Business School)

  • Groh, Alexander P.

    (EMLYON Business School)

Abstract

We examine the determinants of commercial real estate investments using a unique set of panel data series for 47 countries worldwide, ranging from 2000 to 2009. We explore how different socio-economic, demographic and institutional characteristics affect commercial real estate investment activity through both cross-sectional and time-series analyses, running augmented random effect panel regressions. We provide evidence that economic growth, rapid urbanization and compelling demographics attract real estate investments and also confirm that lack of transparency in a country's legal framework, administrative burdens of doing real estate business, socio-cultural challenges and political instabilities reduce international real estate allocations.

Suggested Citation

  • Lieser, Karsten & Groh, Alexander P., 2011. "The determinants of international commercial real estate investments," IESE Research Papers D/935, IESE Business School.
    • Handle: RePEc:ebg:iesewp:d-0935
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    File URL: http://www.iese.edu/research/pdfs/DI-0935-E.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Real Estate Investments; International Asset Allocation; Real Estate Market Attractiveness;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • P25 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Urban, Rural, and Regional Economics
    • P52 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies

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