Do residential property companies systematically adjust their capital structure? : The case of Germany


Kurzrock, Björn-Martin ; Mokinski, Frieder ; Schindler, Felix ; Westerheide, Peter


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URL: http://ub-madoc.bib.uni-mannheim.de/3142
URN: urn:nbn:de:bsz:180-madoc-31426
Document Type: Working paper
Year of publication: 2011
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: L85 C20 G32 ,
Subject headings (SWD): Deutschland , Wohnungsunternehmen , Finanzplanungsmodell , Eigenfinanzierung , Kapitalstruktur
Keywords (English): Financial leverage , capital structure , property companies , real estate finance
Abstract: This paper analyzes whether predominantly non-listed corporations in the residential property industry systematically adjust their capital structure to changing financing requirements. Since previous research almost exclusively focused on listed companies, little is known about the considerations that drive the choice of capital structure of nonlisted companies. We therefore adopt established testing approaches for the pecking order theory and the trade-off theory from the finance literature, which we then apply to a sample of 1,300 German residential property companies. These companies are characterized by various legal forms and large differences in size. We find that capital structure adjustment behavior differs largely among property companies of different legal forms. While housing cooperatives behave in line with the trade-off theory, the behavior of stock companies and corporations with limited liability is more in line with the pecking order theory.
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Kurzrock, Björn-Martin ; Mokinski, Frieder ; Schindler, Felix ; Westerheide, Peter (2011) Do residential property companies systematically adjust their capital structure? : The case of Germany. Open Access [Working paper]
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