Code for: Home Values and Firm Behaviour
- Bahaj, Saleem (Bank of England)
- Foulis, Angus (Bank of England)
- Pinter, Gabor (Bank of England)
AbstractThe homes of firm owners are an important source of finance for ongoing businesses. We use UK micro-data 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.
Bahaj, Saleem, Angus Foulis, and Gabor Pinter. “Home Values and Firm Behaviour.” American Economic Review, n.d.
Update Metadata: 2020-06-26 | Issue Number: 1 | Registration Date: 2020-06-26