The relationship between housing investment and economic growth in ChinaFA panel analysis using quarterly provincial data
AbstractIn this paper we investigate the long-run and short-run relationship between housing investment and economic growth in China using the quarterly province-level panel data for the period 1999 q1 to 2007 q4. Recently developed econometric techniques for panel unit root testing and heterogeneous panel cointegration analysis are employed. The empirical results provide clear support of a stable long-run relationship between housing investment, non-housing investment and GDP in China. We then estimate the long-run elasticity of GDP with respect to housing investment for the whole country as well as three sub regions. The variations across regions are detected and reasons for this fact are discussed. Based on the panel ECM, we show that there is bidirectional Granger causality between housing investment and GDP in both short run and long run for the whole country, while the impacts of housing investment on GDP behave strikingly differently in the three sub-regions of China.
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Bibliographic InfoPaper provided by Uppsala University, Department of Economics in its series Working Paper Series with number 2008:17.
Length: 26 pages
Date of creation: 02 Dec 2008
Date of revision:
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Postal: Department of Economics, Uppsala University, P. O. Box 513, SE-751 20 Uppsala, Sweden
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Housing investment; Economic growth; Panel cointegration; Granger causality;
Find related papers by JEL classification:
- E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity
- L74 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Construction
- R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-01-03 (All new papers)
- NEP-CNA-2009-01-03 (China)
- NEP-MAC-2009-01-03 (Macroeconomics)
- NEP-TRA-2009-01-03 (Transition Economics)
- NEP-URE-2009-01-03 (Urban & Real Estate Economics)
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- Christian Dreger & Yanqun Zhang, 2010.
"Is There a Bubble in the Chinese Housing Market?,"
Discussion Papers of DIW Berlin
1081, DIW Berlin, German Institute for Economic Research.
- Dreger, Christian & Zhang, Yanqun, 2010. "Is there a bubble in the Chinese housing market?," Discussion Papers 290, European University Viadrina Frankfurt (Oder), Department of Business Administration and Economics.
- Christian Dreger & Yanqun Zhang, 2011. "Is there a bubble in the Chinese housing market?," ERSA conference papers ersa11p261, European Regional Science Association.
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