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House prices, the supply of collateral and the enterprise economy

de Meza, David, Black, J and Jeffreys, D (1996) House prices, the supply of collateral and the enterprise economy. Economic Journal, 106 (434). pp. 60-75. ISSN 0013-0133

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Abstract

This paper investigated the extent to which the supply of collateral affects business formation in the UK. Bank loans are typically secured on the entrepreneur’s house. Using a variety of data and formulations, evidence is found that a 10% rise in the value of unreleased net housing equity increased the number of new VAT registrations by some 5%. Since we find that businesses formed in response to increases in the value of housing assets seem to be of at least average quality as measured by survival chances, there appears to be a large pool of untapped entrepreneurial talent.

Item Type: Article
Official URL: http://www.blackwellpublishing.com/journal.asp?ref...
Additional Information: © 1996 Royal Economic Society
Library of Congress subject classification: H Social Sciences > HB Economic Theory
Sets: Research centres and groups > Managerial Economics and Strategy Group
Departments > Management
Collections > Economists Online
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 09 May 2011 13:15
URL: http://eprints.lse.ac.uk/35822/

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