Impact of Specific Sector Factors on Cash Holdings in Real Estate Investment Trust (REIT): Evidence in Malaysia

Wong, Chi Hui (2022) Impact of Specific Sector Factors on Cash Holdings in Real Estate Investment Trust (REIT): Evidence in Malaysia. Masters thesis, Tunku Abdul Rahman University College.

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Abstract

This paper examines the effects of sector specific factors on cash holdings in Real Estate Investment Trust in Malaysia (M-REIT). Cash holdings in M-REIT is dependent variable in the study while firm size, profitability, leverage, market to book and asset turnover are the independent variable in this study. The whole public listed Real Estate Investment Trust (REIT) in Malaysia, which consists of 17 listed company in Bursa Malaysia are took into sample and the study period employed are 8 years (year 2013 to 2020) with annually observations of 120 samples in the M-REIT’ annual report. The results are generated by using E-view software. The findings of this study are presented by using ordinary least square (OLS) and panel data analysis with random effects and fixed effects estimator. This study found that there exists positive significant relationship between cash holdings in M-REIT and firm size, profitability, leverage and market to book (growth opportunities). The results can be explained by the empirical literature and trade off theory, the pecking order theory and free cash flow theory.