Bahaj, S;
Foulis, A;
Pinter, G;
(2020)
Home Values and Firm Behavior.
American Economic Review
, 110
(7)
pp. 2225-2270.
10.1257/aer.20180649.
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Abstract
The homes of firm owners are an important source of finance for ongoing businesses. We use UK microdata to show that a £1 increase in the value of the homes of a firm's directors increases the firm's investment by £0.03. This effect is concentrated among firms whose directors' homes are valuable relative to the firm's assets, that are financially constrained, and that have directors who are personally highly levered. An aggregation exercise shows that directors' homes are as important as corporate property for collateral driven fluctuations in aggregate investment demand.
| Type: | Article |
|---|---|
| Title: | Home Values and Firm Behavior |
| Open access status: | An open access version is available from UCL Discovery |
| DOI: | 10.1257/aer.20180649 |
| Publisher version: | https://doi.org/10.1257/aer.20180649 |
| Language: | English |
| Additional information: | This version is the version of record. For information on re-use, please refer to the publisher’s terms and conditions. |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices > UCL BEAMS UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Engineering Science UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Engineering Science > UCL School of Management |
| URI: | https://discovery.ucl.ac.uk/id/eprint/10134783 |
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