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- Title
Adjustment Costs and Factor Demand: New Evidence from Firms' Real Estate.
- Authors
Bergeaud, Antonin; Ray, Simon
- Abstract
We study corporate real estate frictions and their effect on firm dynamics and labour demand. We build and simulate a general equilibrium model with heterogeneous firms that predicts the response of firms to a productivity shock in the presence of fixed adjustment costs on real estate. Using a large firm-level database merged with local real estate prices, we then exploit variations in the tax on capital gains to document a causal effect of adjustment costs on firms' labour demand and derive new results on the causes and implications of firms' local relocation.
- Subjects
ADJUSTMENT costs; LABOR demand; LABOR supply; REAL property; LABOR productivity
- Publication
Economic Journal, 2021, Vol 131, Issue 633, p70
- ISSN
0013-0133
- Publication type
Article
- DOI
10.1093/ej/ueaa094