Type
Article
Title
The Collateral Channel: How Real Estate Shocks Affect Corporate Investment
In
American Economic Review
Author(s)
CHANEY Thomas - Département d'économie (Author)
SRAER David - Princeton University (Author)
THESMAR David - Faculté des Hautes Etudes Commerciales (HEC) (Author)
Editor
US : American Economic Association
Volume
102
Number
6
Pages
2381 - 2409 p.
ISSN
00028282
DOI
http://dx.doi . org/10.1257/aer.102.6.2381
Abstract
EN
What is the impact of real estate prices on corporate investment? In the presence of financing frictions, firms use pledgeable assets as collateral to finance new projects. Through this collateral channel, shocks to the value of real estate can have a large impact on aggregate investment. To compute the sensitivity of investment to collateral value, we use local variations in real estate prices as shocks to the collateral value of firms that own real estate. Over the 1993-2007 period, the representative US corporation invests $0.06 out of each $1 of collateral.

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