Whether rapid real estate investment growth inhibits China's innovation is a critical question for China's economic sustainability. Based on China's provincial panel data and using land supply as an instru...Whether rapid real estate investment growth inhibits China's innovation is a critical question for China's economic sustainability. Based on China's provincial panel data and using land supply as an instrumental variable for real estate investment growth, we arrived at the following findings after effectively controlling endogenous factors that could lead to estimation errors. First of all, the faster real estate investment grows in a province, the lower the growth rates of innovation and R&D spending and invention patent authorizations will be in the province, an indication that real estate directly inhibits innovation in China. Such inhibition is particularly pronounced in the industrial sectors. Secondly, in the context of rampant real estate investment, the biased loan maturity structure of China's financial system in favor of the real estate industry further inhibits innovation. This paper has verified the existence of the direct effect of real estate investment growth on regional innovation and its indirect effect on regional innovation through the biased long maturity structure of the financial system. The empirical findings of this paper provide practical policy implications for China to strike a balance between real estate development and an innovation-driven development strategy.展开更多
基金the sponsorship of the Ministry of Education Program“Navigating the New Normal”Scientific Research Foundation of the Renmin University of China“A Study on Limited Catch Up and Transition of China's Trade Pattern:A New Theory Based on Global Trade Scale and Interest Disequilibrium(Grant No.12XNI010)”
文摘Whether rapid real estate investment growth inhibits China's innovation is a critical question for China's economic sustainability. Based on China's provincial panel data and using land supply as an instrumental variable for real estate investment growth, we arrived at the following findings after effectively controlling endogenous factors that could lead to estimation errors. First of all, the faster real estate investment grows in a province, the lower the growth rates of innovation and R&D spending and invention patent authorizations will be in the province, an indication that real estate directly inhibits innovation in China. Such inhibition is particularly pronounced in the industrial sectors. Secondly, in the context of rampant real estate investment, the biased loan maturity structure of China's financial system in favor of the real estate industry further inhibits innovation. This paper has verified the existence of the direct effect of real estate investment growth on regional innovation and its indirect effect on regional innovation through the biased long maturity structure of the financial system. The empirical findings of this paper provide practical policy implications for China to strike a balance between real estate development and an innovation-driven development strategy.
