Housing Collateral and Small Firm Activity in Europe
Type
conference paper
Date Issued
2017
Author(s)
Abstract (De)
We investigate the importance of the housing-based collateral lending channel on firm borrowing, investment and employment. We focus on small firms in France, Italy, Spain and the United Kingdom. To identify a credit supply effect, as opposed to a home-equity driven demand effect, we compare activity in similar firms that differ by the degree of financial opacity, and therefore the degree of their reliance on collateral to overcome borrowing constraints. We find that changing house prices have a more pronounced effect on borrowing, investment and employment in financially more opaque firms. This relationship is particularly strong in southern Europe (Italy and Spain), where financial frictions are larger and the use of collateral more important.
Language
English
HSG Classification
contribution to scientific community
Event Title
2017 Royal Economic Society Annual Conference
Event Location
Bristol, UK
Event Date
10.-12.04.2017
Subject(s)
Division(s)
Contact Email Address
Kristian.blickle@unisg.ch
Eprints ID
250744