| dc.description.abstract | This thesis explores how operating risk and operating efficiency affect the degree of corporate real estate holdings by conducting an ordinary least square regression analysis by using a sample of Taiwan Stock Exchange (TWSE) listed companies from 2009 to 2020. The empirical results indicate four main findings as follows. First, in terms of the degree of operating risk, firms with more stable profitability tend to hold more corporate real estate assets. Second, considering both the stability of profitability and the degree of operating leverage (DOL), firms are likely to hold more real estate assets when their profits are more stable and have lower DOL as well. Third, by considering real estate holdings as an input to provide production or services, firms with higher operating risks tend to employ more leases than real estate holdings, probably to avoid the high transaction costs that the latter may incur. Fourth, firms with better operating efficiency, i.e., as measured by using the real estate turnover ratio, tend to hold less real estate assets. This counter-intuitive result may imply that (i) Corporate executives may not be able to effectively manage corporate real estate holdings as that may be beyond their professional knowledge and skills; or (i) For optimal real estate holdings, there could exist conflict of interests between executives and shareholders. To sum up, this study employs the theoretical model developed Zhao & Sing (2016) by using the sample of TWSE-listed firms, and considers additional factors such as DOL and operating efficiency, resulting in empirical findings consist with that of Zhao & Sing (2016), which use data drawn from the publicly listed U.S. companies to test their hypotheses. In other words, both studies find that steady profitability is essential for firms to hold more real estate assets. | en_US |