REIT Stock Splits and Market Efficiency

  • William G. HardinIII
  • Kartono Liano
  • Gow-Cheng Huang
Original Article

DOI: 10.1007/s11146-005-6409-8

Cite this article as:
Hardin, W.G., Liano, K. & Huang, GC. J Real Estate Finan Econ (2005) 30: 297. doi:10.1007/s11146-005-6409-8

Abstract

An analysis of real estate investment trust (REIT) stock splits is presented. Evaluation of the initial reaction to split REITs supports efficient market pricing where REITs generate statistically significant positive announcement date returns, no statistically significant record date returns, and muted ex-date returns. In the long-term, split REITs do not consistently out perform benchmark portfolios over one-year, two-year, and three-year periods. REITs split subsequent to a substantial run up in stock price and to improve the position of their post split stock price relative to the stock price of the typical REIT.

Key Words

REITsstock splitmarket efficiencybehavioral financelong-term performanceshort-term performance

Copyright information

© Springer Science + Business Media, Inc. 2005

Authors and Affiliations

  • William G. HardinIII
    • 1
  • Kartono Liano
    • 2
  • Gow-Cheng Huang
    • 3
  1. 1.Department of Finance and EconomicsMississippi State UniversityMississippi StateUSA
  2. 2.Department of Finance and EconomicsMississippi State UniversityMississippi StateUSA
  3. 3.Department of Accounting and FinanceAlabama State UniversityMontgomeryUSA