nep-bec New Economics Papers
on Business Economics
Issue of 2011‒09‒16
25 papers chosen by
Christian Calmes
Universite du Quebec en Outaouais

  1. Is the Dragon Learning to Fly? An Analysis of the Chinese Patent Explosion By Markus Eberhardt; Christian Helmers; Zhihong Yu
  2. Why Mergers Fail By Ralph M. Sonenshine
  3. Fair Value Accounting: Information or Confusion for Financial Markets? By Antonio Parbonetti; Andrea Menini; Michel Magnan
  4. Productivity growth and ownership change in China: 1998-2007 By Liu, Jing; Cao, Shutao
  5. Cycles of Wage Discrimination By Biddle, Jeff E.; Hamermesh, Daniel S.
  6. Low cost carriers and the evolution of the US airline industry By Hüschelrath, Kai; Müller, Kathrin
  7. Comparing the Investment Behavior of Public and Private Firms By John Asker; Joan Farre-Mensa; Alexander Ljungqvist
  8. Are occupations paid what they are worth? An econometric study of occupational wage inequality and productivity By François Rycx; Stephan K. S. Kampelmann
  9. The dynamics of a Bertrand duopoly with differentiated products and bounded rational firms revisited By Fanti, Luciano; Gori, Luca
  10. Improving GDP Measurement: A Forecast Combination Perspective By Boragan Aruoba; Francis X. Diebold; Jeremy Nalewaik; Frank Schorfheide; Dongho Song
  11. Private Equity and Employment By Steven J. Davis; John C. Haltiwanger; Ron S. Jarmin; Josh Lerner; Javier Miranda
  12. Indexed debt contracts and the financial accelerator By Charles T Carlstrom; Timothy S Fuerst; Matthias Paustian
  13. Price setting in a leading Swiss online supermarket By Martin Berka; Michael B. Devereux; Thomas Rudolph
  14. Ownership Dispersion and Capital Structures in Family firms: A study of closed medium sized enterprises By Bjuggren, Per-Olof; Duggal, Rubecca; Giang, Dinh Tung
  15. Cyclical Changes in Firm Volatility By Emmanuel De Veirman; Andrew T. Levin
  16. Offshoring and volatility: more evidence from Mexico's maquiladora industry By Roberto A. Coronado
  17. A Corporation's Culture as an Impetus for Spinoffs and a Driving Force of Industry Evolution By Christian Cordes; Peter J. Richerson; Georg Schwesinger
  18. Cyclicality of Credit Supply: Firm Level Evidence By Bo Becker; Victoria Ivashina
  19. Housing Market Dynamics: Any News? By Sandra Gomes; Caterina Mendicino
  20. Sorting into Outsourcing: Are Pro ts Taxed at a Gorilla's Arm's Length? By Bauer, Christian; Langenmayr, Dominika
  21. Examining the impact of credit access on small firm survivability By Traci L. Mach; John D. Wolken
  22. Organizational design of multi-product multi-market firms By Joaquín Coleff
  23. Technology capacity, product position and firm’s competitiveness: an empirical analysis By Gao, Yanyan; Liu, Zhibiao; Song, Shunfeng; Zheng, Jianghuai
  24. Simultaneous determination of market value and risk premium in the valuation of firms By Stefan Lutz
  25. House prices and credit constraints: making sense of the U.S. experience By John V. Duca; John Muellbauer; Anthony Murphy

  1. By: Markus Eberhardt; Christian Helmers; Zhihong Yu
    Abstract: This paper analyses characteristics and determinants of the recent explosion of patent filings by Chinese firms both in China and the United States. We construct a firm-level dataset by matching USPTO and SIPO patents to Chinese manufacturing census data for the period 1999-2006. Using this integrated firm-level dataset, we show that the patent explosion is accounted for by a tiny, highly select group of Chinese companies in the information & communication technology (ICT) equipment industry. This handful of ICT companies accounts for nearly all Chinese USPTO patent filings as well as the vast majority of domestic SIPO patents despite there being a larger number of Chinese companies distributed across a wider range of industries that seeks patent protection domestically. Our empirical analysis further suggests that firms patenting in both US and China are considerably younger, larger and substantially more export-oriented than firms patenting exclusively in China. Our study contributes to the debate on China’s innovative prowess and its potential to transition from an imitator to an innovator economy.
    Keywords: China, firm, patents.
    JEL: L25 O12
    Date: 2011
  2. By: Ralph M. Sonenshine
    Abstract: A number of empirical studies have shown that negative abnormal returns often result shortly after a once promising merger is consummated. There are few consistent explanations, however, as to why so many mergers result in such poor performance. This paper sheds light on this issue by examining the effect that structural factors (including market concentration and R&D intensity) have on post-merger abnormal returns. The paper also attempts to assess how differences in valuation among bidders, along with the presence of multiple bidders, influencethe performance of the merged firm. Our findings show that firm value is positively impacted in the first one to three years post merger by acquiring related assets, but that participating in a merger wave in these years has a negative influence. Over longer periods of time these effects are not evident and instead post-merger performance is impacted foremost by intangible asset intensity.
    Keywords: Mergers, Challenges, Abnormal Returns, Research and Development (R&D), Market Concentration
    Date: 2011–07
  3. By: Antonio Parbonetti; Andrea Menini; Michel Magnan
    Abstract: The recent financial crisis has led to a critical evaluation of the role that fair value accounting may have played in undermining the stability of the financial system. Reacting to the pressures of banking regulators and governments, standard-setters have brought forward additional guidance on the application of fair value accounting. This paper examines if and how fair value reporting by U.S. commercial banks during the 1996-2009 period influences the quality of information used by financial analysts. Our results show that, overall, the greater the extent of a bank’s assets and liabilities reported at fair value, the more dispersed are analysts’ earnings forecasts. Moreover, as the proportion of assets measured at fair value increases, properties of analysts’ forecasts become less desirable, showing a decrease in the precision of public or private information. The informational properties of fair value disclosure decrease as we move from level 2 to mark-to-model data (level 3). Nevertheless, additional analyses suggest that the disclosure of levels has been beneficial to investors as it enhanced private information precision resulting in more accurate and less dispersed analysts’ forecasts. Finally, the disclosure about the valuation of assets that are measured at fair value on a non-recurring basis reduces accuracy and public information precision while enhancing dispersion. <P>La récente crise financière a amené une réévaluation du rôle que l’utilisation de la comptabilité à la juste valeur peut avoir sur la stabilité du système bancaire. Suite à l’intervention des organismes de réglementation des banques et de certains gouvernements, les normalisateurs comptables ont élaboré davantage les paramètres de mise en œuvre de la comptabilité à la juste valeur. Cette recherche examine si et comment l’utilisation de la comptabilité à la juste valeur par les banques américaines entre 1996 et 2009 a influencé la qualité de l’information accessible aux analystes financiers pour la préparation de leurs prévisions. Nos résultats montrent, qu’en général, plus grande est la proportion de l’actif et du passif d’une banque qui repose sur la comptabilité à la juste valeur, plus grande est la dispersion des prévisions de bénéfices effectuées par les analystes. En outre, une augmentation de la proportion de l’actif mesuré à la juste valeur est associée avec un environnement informationnel moins favorable pour les analystes (diminution dans la précision de l’information privée et de l’information publique). Cet effet est accentué pour l’actif ou le passif mesuré de niveau 3 (mesure selon modèle). Cependant, la décision récente de divulguer les niveaux d’évaluation à la juste valeur (niveaux 1, 2 et 3) a amélioré la précision et le consensus des prévisions de bénéfice des analystes. Finalement, la divulgation de l’évaluation d’actifs qui sont mesurés à la juste valeur mais sur une base ponctuelle et non-récurrente semble réduire la précision des prévisions de bénéfice.
    Keywords: Fair value accounting, governance, risk management, earnings forecasts analysts, valuation of assets disclosure, Comptabilité à la juste valeur, gouvernance, prévisions de bénéfices des analystes, divulgation de l’évaluation d’actifs
    Date: 2011–08–01
  4. By: Liu, Jing; Cao, Shutao
    Abstract: This paper studies the industry productivity dynamics in China’s manufacturing sector from 1998 to 2007, and in particular, explores to what extent the privatization of state-owned enterprises (SOEs) contributes to the aggregate productivity growth. Our results show that, though non-SOEs on average are more productive than SOEs, the average productivity growth among SOEs is greater than the privately-owned firms. Industry concentration, taxation, and credit market all account for this difference in growth between SOEs and non-SOEs. In addition, industry productivity growth is mainly attributed to the growth of non-SOEs, entry of non-SOE firms, and the exit of SOEs. However, non-SOE firms that are transformed directly from SOEs make a small but negative contribution to industry productivity growth.
    Keywords: Productivity Growth, Industry Dynamics, Ownership Change, Reallocation
    JEL: E6 D24 O4
    Date: 2011–04–15
  5. By: Biddle, Jeff E. (Michigan State University); Hamermesh, Daniel S. (University of Texas at Austin)
    Abstract: Using CPS data from 1979-2009 we examine how cyclical downturns and industry-specific demand shocks affect wage differentials between white non-Hispanic males and women, Hispanics and African-Americans. Women's and Hispanics' relative earnings are harmed by negative shocks, while the earnings disadvantage of African-Americans may drop with negative shocks. Negative shocks also appear to increase the earnings disadvantage of bad-looking workers. A theory of job search suggests two opposite-signed mechanisms that affect these wage differentials. It suggests greater absolute effects among job-movers, which is verified using the longitudinal component of the CPS.
    Keywords: women, minorities, beauty, search models
    JEL: E29 J71
    Date: 2011–08
  6. By: Hüschelrath, Kai; Müller, Kathrin
    Abstract: The article studies the evolution of the U.S airline industry from 1995 to 2009 using T-100 traffic data and DB1B fare data from the U.S. Department of Transportation. Based on a differentiation in market size and major players, entry and exit, concentration, fares, service, costs and profits, the article provides a fresh look on recent developments in the structure, conduct and performance of the domestic U.S. airline industry in light of both the substantial growth of low cost carriers and severe internal and external shocks such as merger and bankruptcy activity or the recent recession. Unlike previous studies, a consistent split of the analysis in network carriers and low cost carriers is introduced. In general, we find that the competitive interaction between network carriers and low cost carriers increased substantially throughout the last decade and must be considered as the main driver of competition in the domestic U.S. airline industry. --
    Keywords: Airline industry,deregulation,network carrier,low cost carrier
    JEL: L40 L93
    Date: 2011
  7. By: John Asker; Joan Farre-Mensa; Alexander Ljungqvist
    Abstract: We evaluate differences in investment behavior between stock market listed and privately held firms in the U.S. using a rich new data source on private firms. Listed firms invest less and are less responsive to changes in investment opportunities compared to observably similar, matched private firms, especially in industries in which stock prices are particularly sensitive to current earnings. These differences do not appear to be due to unobserved differences between public and private firms, how we measure investment opportunities, lifecycle differences, or our matching criteria. We suggest that the patterns we document are most consistent with theoretical models emphasizing the role of managerial myopia.
    JEL: D21 D92 G31 G32 G34
    Date: 2011–09
  8. By: François Rycx; Stephan K. S. Kampelmann
    Abstract: Labour economists typically assume that pay differences between occupations can be explained with variations in productivity. The empirical evidence on the validity of this assumption is surprisingly thin and subject to various potential biases. The authors use matched employer-employee panel data from Belgium for the years 1999-2006 to examine occupational productivity-wage gaps. They find that occupations play distinct roles for remuneration and productivity: while the estimations indicate a significant upward-sloping occupational wage-profile, the hypothesis of a flat productivity-profile cannot be rejected. The corresponding pattern of over- and underpayment stands up to a series of robustness tests.
    Keywords: Labour productivity; wages; occupations; production function; matched employer-employee data
    JEL: J24 J31 J44
    Date: 2011–08–30
  9. By: Fanti, Luciano; Gori, Luca
    Abstract: We revisit the study of the dynamics of a duopoly game à la Bertrand with horizontal product differentiation and bounded rational firms analysed by Zhang et al. (2009), (Zhang, J., Da, Q., Wang, Y., 2009. The dynamics of Bertrand model with bounded rationality. Chaos, Solitons and Fractals 39, 2048–2055), by introducing sound microeconomic foundations. We study how an increase in the relative degree of product differentiation affects the stability of the unique positive Bertrand-Nash equilibrium, in the case of both linear and non-linear costs. We show that an increase in either the degree of substitutability or complementarity between goods of different variety may destabilise the equilibrium of the two-dimensional system through a period-doubling bifurcation. Moreover, by using numerical simulations (i.e., phase portraits, sensitive dependence on initial conditions and Lyapunov exponents), we find that a “quasi-periodic” route to chaos and a large gamma of strange attractors for the cases of both substitutability and complementarity can occur.
    Keywords: Bifurcation; Chaos; Differentiated products; Duopoly; Price competition
    JEL: L13 D43 C62
    Date: 2011–09–09
  10. By: Boragan Aruoba (Department of Economics, University of Maryland); Francis X. Diebold (Department of Economics, University of Maryland); Jeremy Nalewaik (Federal Reserve Board, Washington D.C.); Frank Schorfheide (Department of Economics, University of Pennsylvania); Dongho Song (Department of Economics, University of Pennsylvania)
    Abstract: Two often-divergent U.S. GDP estimates are available, a widely-used expenditure side version, GDPE, and a much less widely-used income-side version, GDPI . We propose and explore a "forecast combination" approach to combining them. We then put the theory to work, producing a superior combined estimate of GDP growth for the U.S., GDPC. We compare GDPC to GDPE and GDPI, with particular attention to behavior over the business cycle. We discuss several variations and extensions.
    Keywords: National Income and Product Accounts, Output, Expenditure, Economic Activity, Business Cycle, Recession
    JEL: E01 E32
    Date: 2011–09–06
  11. By: Steven J. Davis; John C. Haltiwanger; Ron S. Jarmin; Josh Lerner; Javier Miranda
    Abstract: Private equity critics claim that leveraged buyouts bring huge job losses. To investigate this claim, we construct and analyze a new dataset that covers U.S. private equity transactions from 1980 to 2005. We track 3,200 target firms and their 150,000 establishments before and after acquisition, comparing outcomes to controls similar in terms of industry, size, age, and prior growth. Relative to controls, employment at target establishments declines 3 percent over two years post buyout and 6 percent over five years. The job losses are concentrated among public-to-private buyouts, and transactions involving firms in the service and retail sectors. But target firms also create more new jobs at new establishments, and they acquire and divest establishments more rapidly. When we consider these additional adjustment margins, net relative job losses at target firms are less than 1 percent of initial employment. In contrast, the sum of gross job creation and destruction at target firms exceeds that of controls by 13 percent of employment over two years. In short, private equity buyouts catalyze the creative destruction process in the labor market, with only a modest net impact on employment. The creative destruction response mainly involves a more rapid reallocation of jobs across establishments within target firms.
    JEL: G24 G34 J23 L25
    Date: 2011–09
  12. By: Charles T Carlstrom; Timothy S Fuerst; Matthias Paustian
    Abstract: This paper addresses the positive and normative implications of indexing risky debt to observable aggregate conditions. These issues are pursued within the context of the celebrated financial accelerator model of Bernanke, Gertler and Gilchrist (1999). The principal conclusions are that the optimal degree of indexation is significant, and that the business cycle properties of the model are altered under this level of indexation.
    Keywords: Indexation (Economics) ; Financial markets
    Date: 2011
  13. By: Martin Berka; Michael B. Devereux; Thomas Rudolph
    Abstract: We study a newly released data set of scanner prices for food products in a large Swiss online supermarket. We find that average prices change about every two months, but when we exclude temporary sales, prices are extremely sticky, changing on average once every three years. Non-sale price behavior is broadly consistent with menu cost models of sticky prices. When we focus specifically on the behavior of sale prices, however, we find that the characteristics of price adjustment seems to be substantially at odds with standard theory.
    Keywords: Pricing ; Profit
    Date: 2011
  14. By: Bjuggren, Per-Olof (The Ratio Institute and Jönköping International Business School); Duggal, Rubecca (Jönköping International Business School and Center for Family Enterprise and Ownership in Jönköping); Giang, Dinh Tung (Jönköping International Business School)
    Abstract: Family firms are entities that possess and contribute greatly to all economies worldwide. In the following study we investigate capital structures and ownership dispersion among Swedish family firms. In order to find concluding results, we proceed with a regression between leverage and family business, leverage and family firm age, and leverage and ownership dispersion. Our regression outcomes support a U- shaped relationship between family ownership dispersion and leverage, but do not confirm a relation between leverage and family business. Earlier studies made in the field have generated differing results; however, there are some studies that are actually in line with our findings. A unique database developed at Jönköping University is used that enables us to obtain access to firm level data. Earlier studies in the same genre have only had access to industry level data.
    Keywords: Family firms; Capital structure; Closed medium sized enterprises; Ownership Dispersion; Corporate Governance
    JEL: G30
    Date: 2011–09–06
  15. By: Emmanuel De Veirman; Andrew T. Levin
    Abstract: We estimate changes in the volatility of firm-level sales, earnings and employment growth of US firms. Our method differs from existing measures for firm-level sales and employment volatility in that it not only captures longer-run changes in volatility, but also measures cyclical changes in firm volatility. We detect substantial cyclical variation in firm-specific volatility around trend. Firm-specific volatility was low in the early 1990s, rose in the mid- and late-1990s, and was high around 2000. Our results are consistent with the hypothesis, deduced from models with financial frictions, that rising idiosyncratic volatility before 2001 contributed to the coincident rise in the external finance premium and to the 2001 recession. Endogenous pricing models imply that price adjustment is less frequent, and disinflation more costly, when firm-specific volatility is low. Consistent with endogenous pricing models, we find that the output cost of disinflation was three times larger in the early 1990s than in the early 2000s.
    JEL: C33 E31 E32
    Date: 2011–09
  16. By: Roberto A. Coronado
    Abstract: In recent papers, Bergin, Feenstra, and Hanson (2007 and 2009, hereafter BFH) analyze the impact that offshoring has in employment and output volatility, particularly on the Mexican maquiladora industry. Their empirical results indicate that employment and output in the offshoring manufacturing plants in Mexico are more volatile than their counterparts in the U.S. Such empirical results suggest that the maquiladora industry (offshoring) can help the U.S. industrial sector to better absorb shocks. In this paper, I expand BFH's empirical analysis in different directions. The empirical results I provide here suggest that the volatility in employment and output in Mexico's maquiladoras is greater than the one estimated by BFH. Therefore, offshoring via the maquiladora industry in Mexico can act as a greater cushion for business cycle fluctuations in the U.S.
    Keywords: Business cycles ; International trade
    Date: 2011
  17. By: Christian Cordes; Peter J. Richerson; Georg Schwesinger
    Abstract: In infant industries, a great share of new market opportunities is depleted by firms that spinoff from incumbents. A model emphasizing the relation between incumbents' evolving corporate cultures and the generation of spinoffs explains this regularity in industry evolution. Organizations reach a critical size that entails the collapse of a cooperative culture and triggers the exodus of personnel founding own firms. Thereby, organizations with a cooperative culture active in a dynamic business environment provide ideal training grounds for potential founders. We relate our findings to empirical evidence on developmental patterns in industries, such as genealogies and performance of spinoffs.
    Keywords: Spinoff Formation, Critical Firm Size, Firm Performance, Industry Evolution, Corporate Culture Length 23 pages
    JEL: C61 D21 L25 L26 M13 M14
    Date: 2011–08
  18. By: Bo Becker; Victoria Ivashina
    Abstract: Theory predicts that there is a close link between bank credit supply and the evolution of the business cycle. Yet fluctuations in bank-loan supply have been hard to quantify in the time-series. While loan issuance falls in recessions, it is not clear if this is due to demand or supply. We address this question by studying firms’ substitution between bank debt and non-bank debt (public bonds) using firm-level data. Any firm that raises new debt must have a positive demand for external funds. Conditional on issuance of new debt, we interpret firm’s switching from loans to bonds as a contraction in bank credit supply. We find strong evidence of substitution from loans to bonds at times characterized by tight lending standards, high levels of non-performing loans and loan allowances, low bank share prices and tight monetary policy. The bank-to-bond substitution can only be measured for firms with access to bond markets. However, we show that this substitution behavior has strong predictive power for bank borrowing and investments by small, out-of-sample firms. We consider and reject several alternative explanations of our findings.
    JEL: E32 E44 G21
    Date: 2011–09
  19. By: Sandra Gomes; Caterina Mendicino
    Abstract: This paper quantifies the role of expectation-driven cycles for housing market fluctuations in the United States. We find that news shocks: (1) account for a sizable fraction of the variability in house prices and other macroeconomic variables over the business cycle and (2) significantly contributed to booms and busts episodes in house prices over the last three decades. By linking news shocks to agents’ expectations, we find that house prices were positively related to inflation expectations during the boom of the late 1970’s while they were negatively related to interest rate expectations during the housing boom that peaked in the mid-2000’s.
    JEL: C50 E32 E44
    Date: 2011
  20. By: Bauer, Christian; Langenmayr, Dominika
    Abstract: This article analyzes profit taxation according to the arm's length principle in a new model where heterogeneous firms sort into foreign outsourcing. We show that multinational firms are able to shift profits abroad even if they fully comply with the tax code. This is because, in equilibrium, intra-firm transactions occur in firms that are better than the market at input production. Transfer prices set at market values following the arm's length principle thus systematically exceed multinationals' marginal costs. This allows for a reduction of tax payments with each unit sold. The optimal organization of firms hence provides a new rationale for the empirically observed lower tax burden of multinational corporations.
    Keywords: outsourcing; profit taxation; transfer pricing; arm's length principle; multinational firms
    JEL: F23 L22 H25
    Date: 2011–09
  21. By: Traci L. Mach; John D. Wolken
    Abstract: This paper examines the effects of credit availability on small firm survivability over the period 2004 to 2008 for non-publicly traded small enterprises. Using data from the 2003 Survey of Small Business Finances, we develop failure prediction models for a sample of small firms that were confirmed to have been in business as of December 2003, with particular attention to the impact of credit constraints. We find that credit constrained firms were significantly more likely to go out of business than non constrained firms. Moreover, credit constraint and credit access variables appear to be among the most important factors predicting which small U.S. firms went out of business during the 2004-2008 period even though an extensive set of firm, owner, and market characteristics were also included as explanatory factors.
    Date: 2011
  22. By: Joaquín Coleff
    Abstract: In this paper, we seek to understand how a multi-product multi-market firm (for example, a multinational firm) designs its organizational structure and compensation scheme when its profitability is conditioned by how market information flows within the company. By modifying its organizational structure–centralizing or decentralizing decision making–and changing the weights of its compensation scheme, the firm can shape how information flows and is represented, changing the firm’s profitability. We find that, when being multi-product (having to allocate a scarce resource between markets), the headquarters links the organizational design of decision rights between different product markets. The headquarters decentralizes decision rights in products with higher returns to product differentiation while it centralizes decision rights in products with lower returns to product differentiation. As centralization is complementary with product standardization and decentralization is complementary with product differentiation, the organizational design conditions the firm’s market policy. The relation among product’s decision rights remains even when the headquarters cannot control how local managers allocate resources in their own local divisions. Our results are robust to different generalizations. Our paper therefore, contributes to the literature on organizational design by analyzing the case of multi-product multi-market firms.
    Keywords: : Multinational, Multi-product, Organization Design, Resource Scarcity, Cheap Talk
    JEL: D2 D8 L2 G34
    Date: 2011–05
  23. By: Gao, Yanyan; Liu, Zhibiao; Song, Shunfeng; Zheng, Jianghuai
    Abstract: Using firm-level data from a 2009 survey conducted in Suzhou City, Jiangsu Province, China, this paper examines impacts of technology capacity and value-chain position on firm’s product competitiveness. Both technology capacity and product competitiveness are self-assessed relative to other firms and products in the same industry. The position of value-chain is measured relative to if a firm is an original brand manufacturer or not. Our empirical results show that competitiveness rises with firm’s technology capacity and its position in the global value chain. This finding is consistent with the theoretical prediction. The paper also investigates determinants of technology capacity and value-chain position, including firm’s size, R&D spending, location dummies, education level of technical and management personnel, wages of technical and management personnel, and enterprise ownership. Bootstrapping, Probit, and linear probability regression models are employed.
    Keywords: Technology Capacity; Original Brand Manufacturer; Competitiveness; Global Value Chain; Bootstrapping
    JEL: F23 L10
    Date: 2009–11
  24. By: Stefan Lutz
    Date: 2011
  25. By: John V. Duca; John Muellbauer; Anthony Murphy
    Abstract: Most U.S. house price models break down in the mid-2000s due to the omission of exogenous changes in mortgage credit supply (associated with the subprime mortgage boom) from house price-to-rent ratio and inverted housing demand models. Previous models lack data on credit constraints facing first-time homebuyers. Incorporating a measure of credit conditions—the cyclically adjusted loan-to-value ratio for first-time buyers—into house price-to-rent ratio models yields stable long-run relationships, more precisely estimated effects, reasonable speeds of adjustment and improved model fits.
    Keywords: Housing - Prices ; Subprime mortgage ; Credit ; Rent
    Date: 2011

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