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Homeownerhip and entrepreneurship

Bracke, Philippe , 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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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
Library of Congress subject classification: H Social Sciences > HC Economic History and Conditions
Journal of Economic Literature Classification System: D - Microeconomics > D1 - Household Behavior and Family Economics > D14 - Personal Finance
G - Financial Economics > G1 - General Financial Markets > G11 - Portfolio Choice; Investment Decisions
L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L20 - General
R - Urban, Rural, and Regional Economics > R2 - Household Analysis > R21 - Housing Demand
Sets: Departments > Geography and Environment
Departments > Methodology
Research centres and groups > Spatial Economics Research Centre
Research centres and groups > Centre for Economic Performance (CEP)
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: SERCDP0103
Funders: Economic and Social Research Council (ESRC), Department for Business, Innovation & Skills (BIS) , Welsh Assembly Government
Date Deposited: 29 Jul 2014 13:43
URL: http://eprints.lse.ac.uk/58436/

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