Adjustment costs and factor demand: new evidence from firms' real estate

Antonin Bergeaud and Simon Ray

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We study corporate real estate frictions and their effect on firm dynamics and labour demand. We build and simulate a general equilibrium model with heterogeneous firms that predicts the response of firms to a productivity shock in the presence of fixed adjustment costs on real estate. Using a large firm-level database merged with local real estate prices, we then exploit variations in the tax on capital gains to document a causal effect of adjustment costs on firms' labour demand and derive new results on the causes and implications of firms' local relocation.

JEL-codes: D21 H25 J21 O52 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2021-01-01
New Economics Papers: this item is included in nep-bec, nep-dge and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Published in Economic Journal, 1, January, 2021, 131(633), pp. 70 - 100. ISSN: 0013-0133

Downloads: (external link)
http://eprints.lse.ac.uk/114481/ Open access version. (application/pdf)

Related works:
Journal Article: Adjustment Costs and Factor Demand: New Evidence from Firms’ Real Estate (2021)
Working Paper: Adjustment Costs and Factor Demand: New Evidence From Firms Real Estate (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:114481

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