Housing wealth, business creation and dissolution, in the U.K. regions

✍ Scribed by Martin T. Robson

• Publisher: Springer US
• Year: 1996
• Tongue: English
• Weight: 715 KB
• Volume: 8
• Category: Article
• ISSN: 0921-898X
• DOI: 10.1007/bf00391974

✦ Synopsis

A number of recent studies have suggested that access to collateral in the form of housing assets may be an important factor in the process of new firm formation. In particular, it has been suggested that variations in housing wealth may be able to account for a substantial proportion of the variation in rates of business creation within and between the U.K. regions. Re-examining this issue, the paper finds that once appropriate allowance is made for the presence of dynamics in the formation process, the evidence for a positive relationship between housing wealth and regional rates of new business creation disappears. However, there is evidence in favour of the proposition that access to external collateral in this form may help established firms to stay in business.