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Urban house prices and investments in small and medium-sized industrial firms: Evidence from provinces of Iran

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  • Hassan F. Gholipour

Abstract

Using data from provinces of Iran from 2005 to 2016 and applying panel cointegrating regressions, I find that increases in real house prices have a negative and statistically significant effect on investments in small and medium-sized industrial firms. There are at least three possible mechanisms through which increases in house prices adversely affect industrial entrepreneurship. They (1) generate housing construction investment opportunities with high returns, (2) attract many urban adults with tertiary education to the real estate brokerage industry, and (3) encourage people to save more to buy houses (which is one of the prerequisites for marriage in Iran).

Suggested Citation

  • Hassan F. Gholipour, 2020. "Urban house prices and investments in small and medium-sized industrial firms: Evidence from provinces of Iran," Urban Studies, Urban Studies Journal Limited, vol. 57(16), pages 3347-3362, December.
    • Handle: RePEc:sae:urbstu:v:57:y:2020:i:16:p:3347-3362
    DOI: 10.1177/0042098019897887
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