How efficient are alternative financial institutions? An empirical investigation of islamic reits in Malaysia

Nor Nazihah Chuweni, Chris Eves, Viet Ngu Hoang, Ihsan Isik, M. Kabir Hassan

Research output: Contribution to journalArticle

4 Citations (Scopus)

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 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 languageEnglish (US)
Pages (from-to)109-139
Number of pages31
JournalJournal of Real Estate Literature
Volume25
Issue number1
StatePublished - Jan 1 2017

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Empirical investigation
Financial institutions
Malaysia
Real estate investment trusts
Capitalization
Financial returns
Efficiency analysis
Diversification

All Science Journal Classification (ASJC) codes

  • Business, Management and Accounting (miscellaneous)
  • Economics, Econometrics and Finance (miscellaneous)

Cite this

Chuweni, Nor Nazihah ; Eves, Chris ; Hoang, Viet Ngu ; Isik, Ihsan ; Hassan, M. Kabir. / How efficient are alternative financial institutions? An empirical investigation of islamic reits in Malaysia. In: Journal of Real Estate Literature. 2017 ; Vol. 25, No. 1. pp. 109-139.
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How efficient are alternative financial institutions? An empirical investigation of islamic reits in Malaysia. / Chuweni, Nor Nazihah; Eves, Chris; Hoang, Viet Ngu; Isik, Ihsan; Hassan, M. Kabir.

In: Journal of Real Estate Literature, Vol. 25, No. 1, 01.01.2017, p. 109-139.

Research output: Contribution to journalArticle

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