Does Access to Housing Wealth Relax Liquidity Constraints for Entrepreneurs? Evidence from Sweden

Liquidity constraints are often seen as a barrier to entrepreneurship, with many relying on personal or informal capital to start a business. This paper examines whether increased access to equity — via rising value of owner-occupied housing — affects the likelihood of business entry. Using detailed Swedish tax return data and exploiting the 2008 property tax reform as a natural experiment, we analyze how changes in house prices influence entrepreneurial activity. While higher housing prices correlate with business ownership and entry, this relationship disappears when isolating the causal effect of the tax reform. These findings contrast earlier findings and suggest that the value of owner-occupied housing proxy for individual characteristics rather than easing liquidity constraints, indicating that such constraints are not a major barrier to entrepreneurship in Sweden.

Hansson, Å. (2026). Does Access to Housing Wealth Relax Liquidity Constraints for Entrepreneurs? Evidence from Sweden.Nordic Journal of Surveying and Real Estate Research, 19(1).