Year: 2013
Type: report
Study design: Observational Study
Abstract: This paper shows that collateral constraints restrict entrepreneurial activity.Our empirical strategy uses variations in local house prices as shocks to the value of collateral available to individuals owning a house and controls for local demand shocks by comparing entrepreneurial activity of homeowners and renters operating in the same region.We find that an increase in collateral value leads to a higher probability of becoming an entrepreneur.Conditional on entry, entrepreneurs with access to more valuable collateral create larger firms and more value added, and are more likely to survive, even in the long run.
DOI: 10.3386/w19680
Authors: Martin Schmalz, David Sraer, David Thesmar
Language: English
Subfield: Management of Technology and Innovation
Domain: Social Sciences
Open Access status: green
Funder: Fondation HEC
OpenAlex ID: W4299436613