Does Relationship-Specific Investment Depend on Asset Ownership? Evidence from a Natural Experiment in the Housing
| Title: | Does Relationship-Specific Investment Depend on Asset Ownership? Evidence from a Natural Experiment in the Housing |
|---|---|
| Authors: | Georg Gebhardt; Jel-classification D; Klaus Schmidt; Tomaso Duso; Florian Englmaier; Nicola Fuchs-schündeln |
| Contributors: | The Pennsylvania State University CiteSeerX Archives |
| Source: | http://www.uni-ulm.de/fileadmin/website_uni_ulm/mawi.inst.160/pdf_dokumente/mitarbeiter/gebhardt/mainInc.pdf?origin%3Dpublication_detail. |
| Publication Year: | 2013 |
| Collection: | CiteSeerX |
| Subject Terms: | Relationship Specific Investment; Hold-Up; Natural Experi- ment |
| Description: | In this paper, I test the most basic prediction of Grossman and Hart (1986): Allocations of asset ownership that expose a party to ex-post ex-propriation reduce this party’s ex-ante relationship specific investments. In the empirical context of the German housing market, I find that relationship specific investments, such as bathroom renovations, are more frequent if the occupant is protected against expropriation because he owns his home. To avoid the endogeneity of the homeownership allocation, I rely on the natu-ral experiment of the German reunification: Under the communist regime, ownership existed but was economically meaningless; yet after reunifica-tion, ownership unexpectedly reacquired legal force. |
| Document Type: | text |
| File Description: | application/pdf |
| Language: | English |
| Relation: | http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.690.1687 |
| Availability: | http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.690.1687; http://www.uni-ulm.de/fileadmin/website_uni_ulm/mawi.inst.160/pdf_dokumente/mitarbeiter/gebhardt/mainInc.pdf?origin%3Dpublication_detail |
| Rights: | Metadata may be used without restrictions as long as the oai identifier remains attached to it. |
| Accession Number: | edsbas.163FA0CE |
| Database: | BASE |