Skip to Main content Skip to Navigation
New interface
Preprints, Working Papers, ...

Housing Collateral and Entrepreneurship

Abstract : This paper shows that collateral constraints restrict firm entry and post-entry growth, even in the long-run. We use French administrative data and exploit cross-sectional variation in local house-price appreciation as shocks to the value of collateral available to homeowners. We control for local demand shocks by comparing homeowners to two control groups that live in the same region but do not experience collateral shocks: (i) renters and (ii) homeowners with a mortgage outstanding, who - in France - cannot take out a second mortgage on their house. In both comparisons, we find that an increase in collateral value leads to a higher probability of becoming an entrepreneur. Conditional on entry, entrepreneurs with access to more valuable collateral use more debt, start larger firms, and remain significantly larger even six years after creation.
Document type :
Preprints, Working Papers, ...
Complete list of metadata
Contributor : Antoine Haldemann Connect in order to contact the contributor
Submitted on : Thursday, February 7, 2019 - 8:55:42 PM
Last modification on : Saturday, June 25, 2022 - 10:56:28 AM




  • HAL Id : hal-02011415, version 1




Martin Schmalz, David Alexandre Sraer, David Thesmar. Housing Collateral and Entrepreneurship. {date}. ⟨hal-02011415⟩



Record views