Enduring Crises: The Link Between Corporate Real Estate and Economic Policy Uncertainty


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Alistair Drew Ingham

371 / 399




International Real Estate Review



This article examines the relationship between corporate real estate (CRE) and economic policy uncertainty (EPU), and how this relationship may aid companies in their decision-making, which form the impetus for this research. Multiple linear regressions are conducted to analyse corporate-level financial performance, using return on assets and market price as indicators, with regard to macroeconomic indicators such as gross domestic product (GDP) growth, inflation, and EPU. A vector error correction model is also used to ascertain the short- and long-term dynamics at play. The results reveal a statistically significant impact by both CRE and EPU on financial performance, as well as a significant interaction between the two variables. This novel estimate affirms that there is indeed a link between CRE held and financial performance during times of economic uncertainty. This article also establishes a link between CRE ownership and company sector, and explores the relationship between the maturity and ownership concentration of companies, with reference to the CRE held, thus providing the basis to show the different decision-making processes of companies at different stages of their lifecycle, and in different sectors.

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Corporate Real Estate, Economic Policy Uncertainty, VECM, Firm Performance, Ownership Concentration, Firm Maturity