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Homeownerhip and entrepreneurship

Bracke, Philippe and Hilber, Christian and Silva, Olmo (2012) Homeownerhip and entrepreneurship. SERC Discussion Papers, SERCDP0103. Spatial Economics Research Centre (SERC), London School of Economics and Political Science, London, UK.

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Identification Number: SERCDP0103

Abstract

We study the link between homeownership and entrepreneurship by exploiting the longitudinal dimension of the British Household Panel Survey (BHPS) and constructing a detailed monthly-spell dataset that tracks individuals‟ job history and tenure choice, coupled with other time-varying characteristics. Our fixed-effects estimates show that purchasing a house reduces the likelihood of starting a business by 20-25%. This result is driven by homeowners with mortgages and persists for several years after entering homeownership. The negative link can be rationalized by portfolio considerations: leveraged housing investments crowd out entrepreneurial investments. Alternative explanations based on credit constraints find little support in our data.

Item Type: Monograph (Discussion Paper)
Official URL: http://www.spatialeconomics.ac.uk/SERC/publication...
Additional Information: © 2012 The Authors
Subjects: H Social Sciences > HC Economic History and Conditions
Sets: Departments > Geography and Environment
Departments > Methodology
Research centres and groups > Spatial Economics Research Centre
Research centres and groups > Centre for Economic Performance (CEP)
Date Deposited: 29 Jul 2014 13:43
Last Modified: 29 Jul 2014 13:43
Funders: Economic and Social Research Council, Department for Business, Innovation & Skills (BIS), Welsh Assembly Government
URI: http://eprints.lse.ac.uk/id/eprint/58436

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