IDEAS home Printed from https://ideas.repec.org/p/hal/wpaper/hal-05688371.html

Collateral Value and Corporate Investment Evidence from the French Real Estate Market
[Valeur du collatéral et investissement des entreprises Un examen fondé sur l’évolution du marché français de l’immobilier]

Author

Listed:
  • Thomas Chaney

    (University of Chicago)

  • David Sraer

    (INSEE - Institut national de la statistique et des études économiques (INSEE))

  • David Thesmar

    (HEC Paris - Ecole des Hautes Etudes Commerciales, CEPR - Center for Economic Policy Research)

Abstract

This paper is an empirical study of the effect of shocks to firms' collateral, with a focus on land holdings. We find evidence that stand-alone French firms are credit constrained. They invest up to .39€ more per extra euro of collateral, and they finance this additional investment by issuing more debt. This result is obtained by looking at the specific case of the Ile de France real estate bubble of the 90s, which we use as a natural experiment providing exogenous variations in land value. Consistent with the view of efficient internal capital markets, we find that the effect collateral on corporate investment is limited to stand-alone firms.

Suggested Citation

  • Thomas Chaney & David Sraer & David Thesmar, 2007. "Collateral Value and Corporate Investment Evidence from the French Real Estate Market [Valeur du collatéral et investissement des entreprises Un examen fondé sur l’évolution du marché français de l’immobilier]," Working Papers hal-05688371, HAL.
    • Handle: RePEc:hal:wpaper:hal-05688371
    Note: View the original document on HAL open archive server: https://insee.hal.science/hal-05688371v1
    as

    Download full text from publisher

    File URL: https://insee.hal.science/hal-05688371v1/document
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:wpaper:hal-05688371. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.