Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/153977
Authors: 
Corradin, Stefano
Popov, Alexander
Year of Publication: 
2013
Series/Report no.: 
ECB Working Paper 1544
Abstract: 
How does home ownership affect new business creation? We develop a model of career choice in the presence of liquidity constraints in which shocks to the value of real estate affect the propensity of potential entrepreneurs to borrow against the value of their property. Using a large US individual-level survey dataset over the 1996-2006 period, we show that a 10% increase in home equity raises the probability of transition into entrepreneurship by up to 14%. Our results persist when we use the topological elasticity of housing supply to generate variation in home equity that is orthogonal to entrepreneurial choice.
Subjects: 
collateral channel
entrepreneurship
Home ownership
JEL: 
G21
L26
Document Type: 
Working Paper

Files in This Item:
File
Size
851.47 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.