 Housing cycle and firm investment: International firm-level evidenceHyunduk Suh and Jin Young Yang Journal of Asian Economics, 2024, vol. 92, issue C Abstract: The macro-finance literature provides conflicting views on how movements in housing price affect firms’ capital spending or R&D. We further explore this issue by analyzing a comprehensive international firm-level data set. We use the housing price component independent of firms’ investment opportunities and credit supply shocks. The results support the collateral channel as housing price and firm investment exhibit a positive relationship. This collateral channel is more distinct for capital expenditure than R&D, and in housing downturns when firms’ credit constraints bind. Nevertheless, housing appreciations are negatively associated with R&D and large housing booms are also detrimental to capital investment, which suggests a possible resource reallocation from the production sector to the housing sector during those phases. Small firms and firms with stronger investment opportunities respond more sensitively to housing price. Countries that rely more on bank financing and collateralized lending display a larger collateral effect in capital expenditure. Keywords: Housing cycle; Investment; R&D; Housing price; Collateral channel (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:asieco:v:92:y:2024:i:c:s1049007824000265 DOI: 10.1016/j.asieco.2024.101731 Access Statistics for this article Journal of Asian Economics is currently edited by C. Wiemer More articles in Journal of Asian Economics from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.