The purpose of this study is to examine the effect of corporate real estate (investment real estate and owned real estate) held by each group of companies of different sizes (large, medium and small) on corporate value and to identify the differences.
Through the results of the analysis, it was confirmed that the smaller the size of the firm, the less the amount of positive influence on firm value, and suggested the need to approach from a different perspective by the size of the firm in establishing and implementing the real estate holding policy. In addition, it confirmed that there is a risk and asset management effect through the possession of real estate by confirming the significant negative relationship between the holding of the corporate real estate and the risk of the firms.

First, from 1,965 non-financial companies listed on the KOSPI and KOSDAQ markets from 1990 to 2018, the effect of the investment real estate and owned real estate held by firms on the corporate value was analyzed using Ohlson''s model. Looking at the results, it was confirmed that the holding of investment real estate and owned real estate in each market of the KOSPI and KOSDAQ during the entire period of 1990 to 2018 showed a significant amount of positive effect on the firm value measured by the stock price, and that the smaller the size of the company, the smaller the positive effect of investment real estate and owned real estate holdings on the stock price.

This is due to the ownership structure in which the decisions of the owners are more reflected in the decision-making by the smaller companies, and it is judged that the effect of increasing the corporate value through the purchase of real estate by the small companies is relatively lower than that of large companies with specialized managers or external monitors. As a basis for this judgment, I presented the analysis results confirming that the smaller the size of the company, the greater the stake in the largest shareholder and the lower the stake in foreign investors. The same phenomenon was also seen in the analysis that classified the companies into manufacturing and non-manufacturing sectors, in the analysis of adding dummy variables of conglomerate, and in the analysis that limited the targets to companies who held investment real estate.

Because fluctuations in the real estate market can affect the relationship between real estate holdings and firm value, I divided the analysis period into real estate rises and falls. This analysis showed a significant positive effect of both the investment and owned real estate on firm value measured as the stock price during the period of the real estate market increase, and the smaller the size of the corporation, the smaller the positive effect of the investment and owned real estate holdings on the stock price. However, when real estate market falls, there was no significant relationship between investment real estate and firm value. But in the case of owned real estate, there was still a positive relationship between real estate holdings and firm value, and the smaller the size of the corporation, the smaller the positive effect of real estate holdings on stock prices.

The final analysis is about the effect of corporate real estate holdings on the systematic and unsystematic risks of corporation. Panel analyses were conducted by setting the annual systematic risks and unsystematic risks of corporation derived using the market model and the Fama-French''s three-factor model as a dependent variable and setting the proportion of corporate real estate holdings as an independent variable. Looking at the results, first, both the investment and owned real estate show negative effects on the systematic risk of the company as measured by β²Var(rm) , so that the holding of the corporate real estate can be used to avoid systematic risks, including macroeconomic factors, from changes in the market as a whole. On the other hand, corporate unsystematic risk measured by Var(ε) was found to have significant positive relationship for owned real estate and significant negative relationship for investment real estate. which indicated that it is difficult to reduce individual or idiosyncratic risk by holding owned real estate because the real estate is difficult to be liquidated or dispersed, while investment real estate could be held in a variety of areas apart from the corporation''s business site, making it easier to liquidate and avoid individual or idiosyncratic risk.

The implications and contributions of this paper are as follows: First, the corporate characteristics (ie the size of the corporation) that have a significant effect on the relevance between real estate holding and firm value are identified. The paper analyzing the characteristics that can effect on the relevance between real estate holding and firm value is insufficient, but the biggest difference from this paper and existing papers is to confirm the characteristic of companies that can be easily understood by anyone, such as the distinction between large, medium and small-sized stocks used in this paper, which affects the relationship between real estate holdings and firm value. Second, the analysis period of prior studies that analyzed the relationship between corporation''s real estate and firm value were relatively short, but the analysis period of this paper was set for a long period of 29 years from 1990 to 2018 to reflect changes in macroeconomic indicators over the long term and to increase the reliability of the research, as well as to accurately identify the different characteristics of real estate in the period of rise and fall in the real estate market. Third, the real estate is identified as a parameter that explains the association between corporate governance and its value as it confirms that there are significant differences in the ownership of the corporation by size and that the smaller the corporation''s size, the less the positive effect of real estate holdings on its firm value.

Finally, unlike previous studies that analyzed relationships between real estate holdings and firm value using only the systematic risk of the corporation as variables, this paper sets the unsystematic risk produced by the market model and Fama-French''s three factor model as another dependent variable to identify the effect of corporate real estate on each of the systematic risk and unsystematic risk of the corporation. This helps to establish a basis for future corporate risk management and suggests a basis to help companies make decisions through real estate holding policies in managing risks in the future by the fact that the direction of the effects of investment and owned real estate on systematic and unsystematic risks are different from each other.