Rotterdam Brown Bag Seminars in Finance

Matteo Millone (VU Amsterdam)
Wednesday, 1 November 2017

We study the effect of housing collateral on entrepreneurial lending in the Netherlands. This collateral channel is especially relevant for sole proprietors for whom there is no legal distinction between the owner and the business. We obtained unique administrative data on the end-of-year outstanding credit of all Dutch sole proprietorships during the period 2007 − 2012. The data allows us to contribute to the existing literature by directly examining the effect of collateral on credit, instead of explaining outcome variables such as business endings or profits. We find no negative effects of housing collateral on the amount of outstanding credit. However, the value of collateral seems to determine the costs of credit. Joint work with Remco Mocking, Benedikt Vogt, and Wolter Hassink.