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Is the Korean housing market following Gangnam style?


  • Khamis Hamed Al-Yahyaee

    (Sultan Qaboos University)

  • Walid Mensi

    (Sultan Qaboos University
    University of Tunis El Manar)

  • Hee-Un Ko

    (Seoul Credit Guarantee Foundation)

  • Massimiliano Caporin

    (University of Padova)

  • Sang Hoon Kang

    (Pusan National University)


Gangnam is a prime district in Korea known for its expensive real estate market due to convenient transportation, shopping and business centers, and elite schools and academies in the area. This paper examines spillovers and network connectedness in the Korean regional markets using the spillover index of Diebold and Yilmaz (J Econom 182:119–134, 2014). We use the quantile regression approach to investigate the macroeconomic factors driving the total spillover effects under low, normal, and high spillovers. We find that the 1997–1998 Asian currency crisis intensified regional spillovers in the Korean housing market. Moreover, Gangnam is the largest transmitter of spillovers across the regional housing markets in Korea. Our visual network illustrates that Gangnam is a hub of connectedness, implying that it is the most influential shock transmitter among the regional housing markets. Our study has an implication for investors: macroeconomic factors affect spillovers across regional housing sales and rental markets under different degrees of spillover.

Suggested Citation

  • Khamis Hamed Al-Yahyaee & Walid Mensi & Hee-Un Ko & Massimiliano Caporin & Sang Hoon Kang, 2021. "Is the Korean housing market following Gangnam style?," Empirical Economics, Springer, vol. 61(4), pages 2041-2072, October.
  • Handle: RePEc:spr:empeco:v:61:y:2021:i:4:d:10.1007_s00181-020-01931-2
    DOI: 10.1007/s00181-020-01931-2

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    More about this item


    Korean regional housing market; Dynamic spillover; Network connectedness; Quantile regression approach; Spillover index;
    All these keywords.

    JEL classification:

    • C58 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Financial Econometrics
    • F37 - International Economics - - International Finance - - - International Finance Forecasting and Simulation: Models and Applications
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation


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