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Competitive Advantages of Hong Kong Land Development Firms in Mainland China: A Tale of Initial Success and Subsequent Decline

Author

Listed:
  • Shi, Song

    (School of Built Environment, University of Technology Sydney. Australia)

  • Wu, Shuping

    (School of Economics and Management, Beijing Jiaotong University, Beijing. China.)

  • Yang, Zan

    (Department of Real Estate and Construction Management, Royal Institute of Technology)

Abstract

The aim of this study is to examine the investment behaviour of Hong Kong-based real estate firms in Mainland China. In particular, this research examines how the competitiveness of Hong Kong developers evolved from initial success to subsequent decline in an emerging and potentially lucrative real estate market in China following the economic reforms of the early 2000s. This study uses a dataset of 305 firm-year observations from 2005 to 2015 and applies ordinary least square regression analysis. The study sample is based on real estate firms headquartered in Hong Kong and publicly listed on the Hong Kong Stock Exchange. It is found that there is a significant positive association between the competitive advantage of Hong Kong-based real estate firms and their out-of-town investment activities in Mainland China. Furthermore, there was a notable decline in land purchase activities among HK-based developers after the initial period of growth, with a shift from super cities to other lower-tiered cities.

Suggested Citation

  • Shi, Song & Wu, Shuping & Yang, Zan, 2023. "Competitive Advantages of Hong Kong Land Development Firms in Mainland China: A Tale of Initial Success and Subsequent Decline," Working Paper Series 23/8, Royal Institute of Technology, Department of Real Estate and Construction Management & Banking and Finance.
    • Handle: RePEc:hhs:kthrec:2023_008
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    More about this item

    Keywords

    growth options; investment activities; investment distance; real estate developments; location choices; Hong Kong developers;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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