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Construction and economic development: the case of Hong Kong

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  • James Wong
  • Y. H. Chiang
  • Thomas Ng

Abstract

The role of construction in economic development is an important issue facing the construction research community, government and international development agencies. Based on empirical analyses, the complexities of the relationship between construction activity and stage of economic development in Hong Kong were examined. With time series data, Granger causality test results show that the construction output particularly the infrastructure sector drives the economic growth of Hong Kong, and not vice versa. Findings further indicate that the role of the local construction industry changes as the economy matures from newly industrializing country (NIC) to advanced industrialized country (AIC) status, as revealed by the diminishing rate of capacity addition by construction as well as the growing maintenance and repair sector. This complies with Bon's inverted U-shaped relationship between construction activity and gross domestic product (GDP). However, the proposition of 'volume follows share' is not supported since the indigenous construction investments still sustain for the service-oriented economy which inevitably needs commercial development and logistics infrastructure to provide the services. The results may be significant for policy makers in NICs, in the long run, to formulate corporate and industrial policies to chart out a viable and sustainable course to revive the vigour of the industry.

Suggested Citation

  • James Wong & Y. H. Chiang & Thomas Ng, 2008. "Construction and economic development: the case of Hong Kong," Construction Management and Economics, Taylor & Francis Journals, vol. 26(8), pages 815-826.
    • Handle: RePEc:taf:conmgt:v:26:y:2008:i:8:p:815-826
    DOI: 10.1080/01446190802189927
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    References listed on IDEAS

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    1. Patricia M. Hillebrandt, 2000. "Economic Theory and the Construction Industry," Palgrave Macmillan Books, Palgrave Macmillan, edition 0, number 978-0-230-37248-1, September.
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    Cited by:

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    2. Sheilla Nyasha & Yvonne Gwenhure & Nicholas M Odhiambo, 2018. "Energy consumption and economic growth in Ethiopia: A dynamic causal linkage," Energy & Environment, , vol. 29(8), pages 1393-1412, December.
    3. Preenithi Aksorn & Bupavech Phansri, 2023. "The influencing factors of area-based infrastructure project sustainability in Thailand," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(11), pages 13521-13539, November.
    4. Saboori, Behnaz & Soleymani, Abdorreza, 2011. "Environmental Kuznets curve in Indonesia, the role of energy consumption and foreign trade," MPRA Paper 31534, University Library of Munich, Germany.
    5. Jose Luis Fuentes-Bargues & Pablo Sebastian Ferrer-Gisbert & Mª. Carmen González-Cruz, 2018. "Analysis of Green Public Procurement of Works by Spanish Public Universities," IJERPH, MDPI, vol. 15(9), pages 1-20, August.
    6. Marian Siminicã & Marioara Avram & Luminita Popescu & Roxana Loredana Avram, 2020. "The Adoption of National Green Procurement Plans from the Perspective of Circular Economy," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 22(53), pages 1-15, February.
    7. José Luis Fuentes-Bargues & Mª José Bastante-Ceca & Pablo Sebastián Ferrer-Gisbert & Mª Carmen González-Cruz, 2020. "Analysis of the Situation of Social Public Procurement of Works at the Valencian Region (Spain)," Sustainability, MDPI, vol. 13(1), pages 1-23, December.
    8. Erol, Isil & Unal, Umut, 2015. "Role of Construction Sector in Economic Growth: New Evidence from Turkey," MPRA Paper 68263, University Library of Munich, Germany.
    9. Akpan, Usenobong F. & Chuku, Agbai, 2011. "Economic Growth and Environmental Degradation in Nigeria: Beyond the Environmental Kuznets Curve," MPRA Paper 31241, University Library of Munich, Germany.
    10. Jose Luis Fuentes-Bargues & Pablo Sebastian Ferrer-Gisbert & Mª Carmen González-Cruz & María Jose Bastante-Ceca, 2019. "Green Public Procurement at a Regional Level. Case Study: The Valencia Region of Spain," IJERPH, MDPI, vol. 16(16), pages 1-24, August.

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