The collateral channel: Dynamic effects of housing market on entrepreneurship

Seungjoon Oh, Jaeyoon Lee and Bong-Geun Choi

Economics Letters, 2021, vol. 198, issue C

Abstract: This paper examines whether and how housing market prices affect entrepreneurship activities. To this end, we empirically test the hypothetical collateral channel, exploiting a large-scale household-level survey from China. We find that a higher growth rate of house prices is associated with a higher propensity of being self-employed of a family member. We further find that lower house price volatility and higher liquidity in the real estate market boost entrepreneurial choices by households. Overall, the results provide favorable empirical evidence for the collateral channel.

Keywords: Entrepreneurship; Housing market; Collateral channel; Housing liquidity; Housing price volatility (search for similar items in EconPapers)
JEL-codes: D10 L26 R12 R31 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:198:y:2021:i:c:s0165176520304213

DOI: 10.1016/j.econlet.2020.109661

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