Land prices, lending to companies and job creations

Leo Kaas, Patrick Pintus and Simon Ray ()
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Simon Ray: Centre de recherche de la Banque de France - Banque de France, GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique

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Abstract: The fluctuations of the value of land held by French firms present a very similar pattern to those of both investment and employment. This Rue de la Banque presents a model in which firms face imperfect labour and credits markets. Due to a collateral constraint for credit, the market value of land in firms' balance sheets plays an important role in determining how much they can borrow, and thus affects their investment levels and hiring decisions. The empirical results confirm the predictions of the theoretical model. Fluctuations in land prices had an impact on the business cycle and on the dynamics of the labour market in France.

Keywords: Economie; quantitative (search for similar items in EconPapers)
Date: 2015-11
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Published in Rue de la Banque, 2015, 14

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01457332

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