The Wealth Effects of Land Acquisition

We examine the wealth effects of land acquisition using on a unique set of public land auction data in Singapore. The results of our event study provide evidence of positive excess returns associated with announcements of successful land acquisition. The evidence also supports the hypothesis that the excess return is related positively to the ability of the successful bidder to create value from the development process. In addition, the magnitude of the excess gains is related positively to the level of uncertainty in a development and inversely to the propensity of the winning bidder engaging in non-wealth maximization activities.