Housing Collateral and Small Firm Activity in Europe

Item Type Conference or Workshop Item (Paper)
Abstract

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.

Authors Blickle, Kristian
Language English
Subjects business studies
economics
finance
HSG Classification contribution to scientific community
Date 2017
Event Title 2017 Royal Economic Society Annual Conference
Event Location Bristol, UK
Event Dates 10.-12.04.2017
Contact Email Address Kristian.blickle@unisg.ch
Depositing User Beatrix Kobelt-Glock
Date Deposited 27 Apr 2017 13:48
Last Modified 07 Aug 2020 00:23
URI: https://www.alexandria.unisg.ch/publications/250744

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Citation

Blickle, Kristian: Housing Collateral and Small Firm Activity in Europe. 2017. - 2017 Royal Economic Society Annual Conference. - Bristol, UK.

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https://www.alexandria.unisg.ch/id/eprint/250744
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