Cash to spend: IPO wealth and house prices

This study demonstrates the impact of initial public offerings (IPOs) on local house prices. Applying spatial difference-in-differences methods to IPOs in California from 1993 to 2017, we find house prices increase by 0.7% to 0.9% near an IPO firm’s headquarters around filing and issuing dates. Upon lock-up expiration, price changes depend on post-issuance returns. Treating the San Francisco Bay as a commuting barrier, we identify sustained price increases after filings and temporary increases after issuing and lock-up expiration. We also confirm post-IPO price divergence between the treatment and synthetic control areas. Our findings indicate the effect of liquid wealth under mild financial constraints.

This is the peer reviewed version of the following article: [Cash to spend: IPO wealth and house prices. Real Estate Economics 51, 1 p68-102 (2022)], which has been published in final form at https://doi.org/10.1111/1540-6229.12406. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions: https://authorservices.wiley.com/author-resources/Journal-Authors/licensing/self-archiving.html#3.

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Work Title Cash to spend: IPO wealth and house prices
Access
Open Access
Creators
  1. Barney Hartman-Glaser
  2. Mark Thibodeau
  3. Jiro Yoshida
Keyword
  1. Initial Public Offerings
  2. Financial constraints
  3. Executive compensation
  4. Liquidity
  5. Spatial difference-in-differences
  6. Synthetic control methods
License In Copyright (Rights Reserved)
Work Type Article
Publisher
  1. Real Estate Economics
Publication Date September 4, 2022
Publisher Identifier (DOI)
  1. https://doi.org/10.1111/1540-6229.12406
Deposited February 11, 2024

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Version 1
published

  • Created
  • Added IPOs_and_Housing.pdf
  • Added Creator Barney Hartman-Glaser
  • Added Creator Mark Thibodeau
  • Added Creator Jiro Yoshida
  • Published
  • Updated Keyword, Publication Date Show Changes
    Keyword
    • Initial Public Offerings, Financial constraints, Executive compensation, Liquidity, Spatial difference-in-differences, Synthetic control methods
    Publication Date
    • 2022-01-01
    • 2022-09-04
  • Updated