House prices and start-up of industrial firms

Using data from provinces of Iran from 2005 to 2015, I examine the relationship between house prices and start-ups of industrial firms. The results from a GMM estimator show a negative and statistically significant effect of house prices on start-ups of industrial firms. This finding is robust using various indicators for industrial firm start-ups and with the inclusion of control variables. I also find that private investments in the housing sector have a negative impact on industrial firm start-ups implying that the Iranian housing boom over the past decade has had a “crowd-out effect” on industrial entrepreneurship across the country.