TOTAL FACTOR PRODUCTIVITY CHANGE IN THE REIT INDUSTRY: THE CASE OF MALAYSIAN REITS DURING AND POST GLOBAL FINANCIAL CRISIS
DOI:
https://doi.org/10.21837/pm.v17i9.594Keywords:
Malmquist index, productivity, technology, efficiency, Malaysian REITsAbstract
The paper examined productivity changes for the Malaysian Real Estate Investment Trust (M-REITs) using a non-parametric approach of Malmquist Productivity Index (MPI) of Data Envelopment Analysis (MPI-DEA). Data was attained from M-REIT annual reports, Thomson Reuters Datastream and Osiris via Bureau Van Dijk for 2007-2015. The non-parametric approach of MPI-DEA examined the Total Factor Productivity Change (TFPCH), Technological Change (TECHCH), Efficiency Change (EFFCH), Pure Technical Efficiency Change (PEFFCH) and Scale Efficiency Change (SECH) indices. On average, the M-REIT industry has faced 14.91% of productivity regress during 2007-2015 period, comprising 49.90% of efficiency increase and 33.40% technological regress. The decomposition of the productivity change index suggests that Malaysian REIT productivity changes were mainly due to efficiency change rather than technological change. These findings could help M-REIT managers to formulate ways to enhance their REIT productivity. The findings are also applicable tosimilar Shariah compliant real estate investment or socially responsible investment.
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eISSN: 0128-0945 © Year. The Authors. Published for Malaysia Institute of Planners. This is an open-access article under the CC BY-NC-ND license.
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