tailieunhanh - Housing prices and corporate innovation in China

Housing prices and Based on the data of 35 major cities in China, this paper examines the impact of the rising housing prices on the innovation activities of Chinese A-share listed companies. We find that the increase in housing prices significantly inhibit the number of patent applications and the proportion of R&D expenditure of listed corporations. In addition, we further consider the ownership structure, and find that the impact of housing price on corporate innovation is more pronounced in state-owned enterprises. This paper reveals the negative impact of a booming real estate market on the real economy from the perspective of innovation in China. | Journal of Applied Finance Banking vol. 9 no. 3 2019 13-34 ISSN 1792-6580 print version 1792-6599 online Scienpress Ltd 2019 Housing Prices and Corporate Innovation in China Wenqing Zhao1 Bing Lu1 and Jianyu Zhang2 Abstract Based on the data of 35 major cities in China this paper examines the impact of the rising housing prices on the innovation activities of Chinese A-share listed companies. We find that the increase in housing prices significantly inhibit the number of patent applications and the proportion of R D expenditure of listed corporations. In addition we further consider the ownership structure and find that the impact of housing price on corporate innovation is more pronounced in state-owned enterprises. This paper reveals the negative impact of a booming real estate market on the real economy from the perspective of innovation in China. JEL classification numbers E44 G31 O32 Keywords real estate markets innovation hosing price 1 Introduction The impact of rising housing prices on the company and the economy has been a topic of concern to policy makers and scholars. Especially in China the relationship between real estate and China s overall macro economy is extremely close. The investment in real estate industry accounts for more than 25 of China s fixed asset investment. In addition real estate accounts for of the total wealth of the people in China which means that up to 3 4 of the wealth of residents is directly linked to real estate while real estate accounts for only of its residents wealth in the United States. China s housing prices have remained 1 PBC school of finance Tsinghua University. 2 School of Environment Natural Resources Renmin University of China Article Info Received November 10 2018. Revised November 29 2018 Published online May 1 2019 14 Wenqing Zhao et al. almost unilaterally rising especially in first-tier cities where housing price bubbles have been really dangerous. Although the prosperity of real estate industry .