The Impact of Corporate Governance Moderating Effects on the Performance of REITs in Asia

Abstract

Corporate governance can have an effect on the organizational behavior of real estate investment trusts (REITs). We examine the moderating effects of corporate governance on Asia REITs' performance. We find significant corporate governance moderating effects on the performance of Asian REITs. Corporate governance could either act as a positive or a negative moderator that could enhance and accelerate performance, return on assets (ROA), return on equity (ROE), and REIT return, and reduce agency costs in Asian REITs. The findings imply that there is a need for transformation and reform in REIT corporate governance. The findings contribute towards Asian REITs' public policy development as REIT corporate governance is found to complement the institutional legal setting and externally managed REITs in Asia. Regulatory bodies of Asian REITs should enforce mandatory and absolute stringent corporate governance regulations on REITs.