The literature shows that despite Sharia-compliant restrictions, Islamic real estate investment trusts (REITs) exhibit higher financial returns than conventional trusts. However, efficiency analysis that 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. The findings suggest that REITs can increase efficiency through good governance, capitalization, and diversification.
|Original language||English (US)|
|Number of pages||31|
|Journal||Journal of Real Estate Literature|
|State||Published - Jan 1 2017|
All Science Journal Classification (ASJC) codes
- Business, Management and Accounting (miscellaneous)
- Economics, Econometrics and Finance (miscellaneous)