Article
How Efficient are Alternative Financial Institutions? An Empirical Investigation of Islamic REITs in Malaysia
Journal of Real Estate Literature
(2017)
Abstract
The literature shows that despite Sharia-compliant restrictions, Islamic Real Estate Investment Trusts (REITs) exhibit higher financial returns than conventional trusts. However, efficiency analysis which directly assesses the effect of Sharia-compliant is lacking. This paper provides the first such analysis of Malaysian REITs from 2007 to 2015. The findings show that Malaysian REITs can reduce their inputs consumption by 35.8% without reducing outputs, implying a significant potential for improvement. Nevertheless Islamic REITs achieve higher efficiency levels than conventional REITs indicating that the Sharia-compliant effect is positive. It is suggested that REITs can increase efficiency through good governance, capitalisation, and diversification.
Publication Date
January 1, 2017
Citation Information
Nor Nazihah Chuweni, Nor Nazihah Chuweni, Chris Eves, Viet Ngu Hoang, et al.. "How Efficient are Alternative Financial Institutions? An Empirical Investigation of Islamic REITs in Malaysia" Journal of Real Estate Literature Vol. 25 Iss. 1 (2017) p. 109 - 139 Available at: http://works.bepress.com/ihsan-isik/6/