A STUDY OF INVESTMENT AND FIRM VALUE : Evidence from public real estate companies in Europe

Abstract: This paper investigated the relationship between investments and value of the 100 public real estate companies in Europe for the period between 2008-2018. Percentage alteration in long-term investments by the firms represents the investments and percentage alteration in total market value is considered as indicator of value of the firms. Effects profitability, growth, interest paid, solvency, liquidity and size on value of the firms are also examined as control variables. The data of this quantitative research consists of financial data extracted from audited financial statements of the targeted companies. The result of correlation analysis revealed the association between variables of the study, except Debt to Equity as indicator of solvency that showed negative correlation. Also, the result of regression analysis showed the positive relationship between investments, as well as, profitability, interest paid, growth, liquidity and size with value of the firms, but negative relationship between Debt to Equity ratio as solvency ratio and value of the targeted firms.