Geography of corporate networks and housing price spillovers: evidence from U.S. States

This study investigates the transmission of housing price shocks across U.S. states through corporate economic networks. We construct each state’s housing price exposure using textual data extracted from the annual 10-K filings of locally headquartered firms. Leveraging this exposure measure, we implement an instrumental variable strategy to examine the spillover effects of housing price growth in economically connected states on local housing markets. Our findings reveal a significant and positive spillover effect, indicating that corporate networks are a crucial conduit for the propagation of housing market dynamics. These effects are amplified in states characterized by more dispersed corporate geographical networks and stronger social connectedness. By identifying corporate economic linkages as a key determinant of housing market interdependencies, this research contributes to the literature on housing market spillovers and provides valuable insights for policymakers and investors concerned with regional economic stability and integration.