Do house prices impact business starts?
AbstractAt the national level, business starts and housing prices both fell dramatically over the 2007–2009 period. Using a proprietary database of business starts this paper quantitatively models the interaction between house price and business starts from 2005 to 2009. We identify the impact by exploiting the cross-sectional variation in house price changes during the period. Controlling for observable and unobservable city characteristics, we find the significance of a robust relationship between house prices and business starts depends on the size of the business starts; a robust link exists between house prices and very small business, whereas, no significant robust link is seen for large business starts.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Housing Economics.
Volume (Year): 22 (2013)
Issue (Month): 1 ()
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Web page: http://www.elsevier.com/locate/inca/622881
House prices; Business starts; Collateral channel;
Find related papers by JEL classification:
- R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
- R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies
- G01 - Financial Economics - - General - - - Financial Crises
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
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