Titelaufnahme

Titel
Real estate prices and corporate investment : theory and evidence of heterogeneous effects across firms / Denis Fougère (CNRS, OSC, LIEPP, Banque de France, CEPR and IZA), Rémy Lecat (Banque de France), Simon Ray (Banque de France, Aix-Marseille University, CNRS and EHESS) ; IZA Institute of Labor Economics
VerfasserFougère, Denis ; Lecat, Rémy ; Ray, Simon
KörperschaftForschungsinstitut zur Zukunft der Arbeit
ErschienenBonn, Germany : IZA Institute of Labor Economics, November 2018
Ausgabe
Elektronische Ressource
Umfang1 Online-Ressource (46 Seiten) : Diagramme
SerieDiscussion paper ; no. 12007
URNurn:nbn:de:hbz:5:2-174013 
Zugriffsbeschränkung
 Das Dokument ist öffentlich zugänglich im Rahmen des deutschen Urheberrechts.
Volltexte
Real estate prices and corporate investment [0.65 mb]
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Zusammenfassung (Englisch)

In this paper, we investigate the effect of real estate prices on productive investment. We build a simple theoretical framework of firms investment with credit rationing and real estate collateral. We show that real estate prices affect firms borrowing capacities through two channels. An increase in real estate prices raises the value of the firms pledgeable assets and mitigates the agency problem characterizing the creditor-entrepreneur relationship. It simultaneously cuts the expected profit due to the increase in the cost of inputs. While the literature only focuses on the first channel, the identification of the second channel allows for heterogeneous effects of real estate prices on investment across firms. We test our theoretical predictions using a large French database. We do find heterogeneous effects of real estate prices on productive investment depending on the position of the firms in the sectoral distributions of real estate holdings. Our preferred estimates indicate that a 10% increase in real estate prices causes a 1% decrease in the investment rate of firms in the lowest decile of the distribution but a 6% increase in the investment rate of firms belonging to the highest decile.