Collateral Values and Corporate Employment

Nuri Ersahin and Rustom M. Irani

Working Papers from U.S. Census Bureau, Center for Economic Studies

Abstract: We examine the impact of real estate collateral values on corporate employment. Our empirical strategy exploits regional variation in local real estate price growth, firm-level data on real estate holdings, as well as establishment-level data on employment and the location of firms' operations from the U.S. Census Bureau. Over the period from 1993 until 2006, we show that a typical U.S. publicly-traded firm increases employment expenditures by $0.10 per $1 increase in collateral. We show this additional hiring is funded through debt issues and the effects are stronger for firms likely to be financially constrained. These firms increase employment at establishments outside of their core industry focus and away from the location of real estate holdings, leading to regional spillover effects. We document how shocks to collateral values influence labor allocation within firms and how these effects show up in the aggregate.

Keywords: Financial Constraints; Collateral Lending Channel; Employment (search for similar items in EconPapers)
JEL-codes: D22 D24 E44 G31 G32 (search for similar items in EconPapers)
Pages: 53 pages
Date: 2015-09
New Economics Papers: this item is included in nep-cfn and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://www2.census.gov/ces/wp/2015/CES-WP-15-30R.pdf Revised version, 2015 (application/pdf)
https://www2.census.gov/ces/wp/2015/CES-WP-15-30.pdf First version, 2015 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cen:wpaper:15-30

Access Statistics for this paper

More papers in Working Papers from U.S. Census Bureau, Center for Economic Studies Contact information at EDIRC.
Bibliographic data for series maintained by Dawn Anderson ().