Real Estate Prices and Firm Capital Structure

• 成果类型: Article
• 署名作者: Cvijanovic, Dragana
• 署名单位: University of North Carolina; University of North Carolina Chapel Hill
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhu035
• 发表日期: 2014
• 页码: 2690
• 关键词: LIQUIDATION VALUES; Market equilibrium; debt structure; bank loans; RENEGOTIATION; determinants; CHOICE; INVESTMENT; reputation; OWNERSHIP

摘要

This paper examines the impact of real estate prices on firm capital structure decisions. For a typical U.S. listed company, a one-standard-deviation increase in predicted value of firm pledgeable collateral translates into a 3 percentage points increase in firm leverage ratio. The identification strategy employs a triple interaction of MSA-level land supply elasticity, real estate prices, and a measure of a firm's real estate holdings as an exogenous source of variation in firm collateral values. Firms significantly change their debt structure in response to collateral value appreciation. The results indicate the importance of collateral values in mitigating potential informational imperfections. (JEL G30, G32)