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What Drives House Building The collateral effect with evidence from China

Author

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  • Chao Jin

Abstract

This paper proposes a dualism of hypothesis derived from dynamic Cournot competition on whether house building is driven by credit constraint corresponding to collateral value. Using monthly data from Jan 2004 to May 2016 of 26 Chinese provinces and 4 direct-controlled municipalities, the empirical test suggests that collateral value do drive house building.JEL Classification: R31; G31; L74Keywords: Housing; Cournot Model; Borrowing Constraint; Collateral Effect

Suggested Citation

  • Chao Jin, 2018. "What Drives House Building The collateral effect with evidence from China," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 8(6), pages 1-1.
    • Handle: RePEc:spt:apfiba:v:8:y:2018:i:6:f:8_6_1
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    References listed on IDEAS

    as
    1. Thomas Chaney & David Sraer & David Thesmar, 2012. "The Collateral Channel: How Real Estate Shocks Affect Corporate Investment," American Economic Review, American Economic Association, vol. 102(6), pages 2381-2409, October.
    2. Edward E. Leamer, 2007. "Housing is the business cycle," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 149-233.
    3. Ding Ding & Xiaoyu Huang & Tao Jin & Waikei Raphael Lam, 2017. "The Residential Real Estate Market in China: Assessment and Policy Implications," Annals of Economics and Finance, Society for AEF, vol. 18(2), pages 411-442, November.
    4. William C. Wheaton, 1999. "Real Estate “Cycles”: Some Fundamentals," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 27(2), pages 209-230, June.
    5. repec:hal:spmain:info:hdl:2441/75koqefued8i7pihbrl9u84p4u is not listed on IDEAS
    6. repec:cuf:journl:y:2017:v:18:i:1:dinghuang is not listed on IDEAS
    7. John Geanakoplos, 2009. "The Leverage Cycle," Cowles Foundation Discussion Papers 1715, Cowles Foundation for Research in Economics, Yale University.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    housing; cournot model; borrowing constraint; collateral effect;
    All these keywords.

    JEL classification:

    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies

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