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| Contagion and REIT Stock Prices Author: Chinmoy Ghosh, Randall S. Guttery, and C. F. Sirmans Start Page: 389 Abstract: This article
investigates the contagious movement of real estate investment trust (REIT) stock prices
in response to real estate news related to financial institutions? real estate portfolios.
The basic hypothesis is that because real estate assets are traded infrequently, the
market has incomplete information about their true value; thus, REIT stock prices react
negatively to announcements of poorly performing real estate portfolios of financial
institutions. Consistent with the hypothesis, significantly negative reactions to these
announcements are found for a portfolio of sixty-nine REITs during the real estate crisis
of 1989–91. |
