Excessive Financial Support, Real Estate Development and Macroeconomic Growth: Evidence from China

摘要

Using monthly panel data for China's 30 provinces from 2007 to 2017, this article analyzes how level of financial support affects the interplay between real estate development and macroeconomic growth. Based on a threshold model, the results suggest that housing price increases substantially impede economic growth, but there is no significant threshold effect for the sample as a whole. On investigating regional cross-sectional variations, we found that local economic situation clearly impacts on this effect, with significant threshold effects detected in subsamples. While housing price may have positive influences on economic growth in the mid-west subgroup with appropriate financial support, more developed regions returned contrary results.