Government real estate interventions and the stock market

Amir Akbari and Karolina Krystyniak

International Review of Financial Analysis, 2021, vol. 75, issue C

Abstract: We study the spillover of government interventions in the real estate market to the stock market. We find that the more active mutual funds decreased ownership in equities with no short-term reversal. Furthermore, they increased ownership in the finance sector stocks without significant changes to their real estate equity holdings. The interventions affecting the riskiness of the finance sector stocks triggered a larger trading response than the ones focused on the real estate sector stocks’ cash flows. Overall, the spillover of the housing market shocks to the stock market seems to be materialized mostly through the discount rate channel.

Keywords: Government externality; Real estate; Institutional investors (search for similar items in EconPapers)
JEL-codes: G14 G18 G23 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:75:y:2021:i:c:s1057521921000788

DOI: 10.1016/j.irfa.2021.101742

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