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Is urbanization improving real estate investment? A cross†regional study of China

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  • Tie†Ying Liu
  • Chi†Wei Su
  • Hsu†Ling Chang
  • Chien†Chi Chu

Abstract

This paper applies bootstrap panel Granger causality to test the relationship between urbanization and real estate investment from 1990 to 2014 for 29 provinces in China. We argue that the patterns of interaction between urbanization and investment in real estate vary across regions. The results show that urbanization does Granger†cause investment in real estate, primarily in the central and northeastern regions of China, while urbanization does not Granger†cause investment in real estate in the eastern and western regions, except for four provinces. Most regions do not have a Granger†causality relationship from real estate investment to urbanization; the exceptions are Henan and Hei Longjiang provinces. Our results only support one theory on the relationship between urbanization and the real estate market for one†third of the provinces. Thus, urbanization can improve real estate investment by increasing the demand for housing as a result of population agglomeration, but urbanization does not depend on real estate investment in China.

Suggested Citation

  • Tie†Ying Liu & Chi†Wei Su & Hsu†Ling Chang & Chien†Chi Chu, 2018. "Is urbanization improving real estate investment? A cross†regional study of China," Review of Development Economics, Wiley Blackwell, vol. 22(2), pages 862-878, May.
    • Handle: RePEc:bla:rdevec:v:22:y:2018:i:2:p:862-878
    DOI: 10.1111/rode.12373
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    Cited by:

    1. Wang, Haining & Cheng, Zhiming & Smyth, Russell & Sun, Gong & Li, Jie & Wang, Wangshuai, 2022. "University education, homeownership and housing wealth," China Economic Review, Elsevier, vol. 71(C).
    2. Weiwei Li & Lisheng Weng & Kaixu Zhao & Sidong Zhao & Ping Zhang, 2021. "Research on the Evaluation of Real Estate Inventory Management in China," Land, MDPI, vol. 10(12), pages 1-29, November.
    3. Yingchao Lin & Zhili Ma & Ke Zhao & Weiyan Hu & Jing Wei, 2018. "The Impact of Population Migration on Urban Housing Prices: Evidence from China’s Major Cities," Sustainability, MDPI, vol. 10(9), pages 1-14, September.
    4. Yu Shen & Wenkai Sun, 2023. "From Villages to Urban Neighborhoods: Urbanization and Health," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 31(2), pages 137-158, March.
    5. Vincenzo Del Giudice & Francesca Salvo & Pierfrancesco De Paola, 2018. "Resampling Techniques for Real Estate Appraisals: Testing the Bootstrap Approach," Sustainability, MDPI, vol. 10(9), pages 1-16, August.
    6. Sidong Zhao & Kaixu Zhao & Ping Zhang, 2021. "Spatial Inequality in China’s Housing Market and the Driving Mechanism," Land, MDPI, vol. 10(8), pages 1-33, August.
    7. Chun Fu & Can Zhou, 2023. "Examining the Impact of Real Estate Development on Carbon Emissions Using Differential Generalized Method of Moments and Dynamic Panel Threshold Model," Sustainability, MDPI, vol. 15(8), pages 1-16, April.
    8. Zhen Yang & Jun Lei & Jian-Gang Li, 2019. "Identifying the Determinants of Urbanization in Prefecture-Level Cities in China: A Quantitative Analysis Based on Spatial Production Theory," Sustainability, MDPI, vol. 11(4), pages 1-18, February.
    9. Qingshan Kong & Haiyang Kong & Silin Miao & Qin Zhang & Jiangang Shi, 2022. "Spatial Coupling Coordination Evaluation between Population Growth, Land Use and Housing Supply of Urban Agglomeration in China," Land, MDPI, vol. 11(9), pages 1-18, August.

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