Home purchase restriction, real estate investment, and corporate innovation

It is ubiquitous for non-real estate firms to condua real estate business in China.Home purchase restriction(HPR)affeas corporate innovation by dampening the real estate investment of non-real estate firms.The extant literature has examined the impaa of HPR on corporate innovation,but it has not focused on the expeaation of HPR and the endogeneity problem.Employing a dataset of 1,830 listed non-real estate firms over the period 2009-2016,this research explores the expectation of HPR on corporate innovation based on the motivations for real estate investment in non-real estate firms.We demonstrate that HPR facilitates the enhancement of research and development(R&D)investment in non-real estate listed firms by hindering real estate investment,particularly for non-high-tech firms.The effects of HPR arrive at the crest in the third implementation year and remain steady thereafter.The real estate investment of non-real estate firms rebounds and the R&D investment declines along with the cancellation of HPR.Tackling the selection bias and endogeneity problems,the baseline results are also robust.Hence,HPR should serve as a long-term vehicle to improving corporate innovation,in addition to preventing housing speculation.

On the Effectiveness and Externalities of the Home Purchase Restriction Policy in China

In order to curb the soaring house prices,the Chinese govemment has been focusing on macro-control of real estate on the demand side.Among them,the Home Purchase Restriction(HPR)is one of the most commonly used policy tools,and its influence has atracted the attention from both the public and the academia.Although many scholars have studied the effectiveness of the home purchase restriction policy,there is n0 universal conclusion and the empirical research on the externalities of this policy is scarce.Based on the daily transaction micro-data of the real estate sales market,the rental market and the land market,this paper uses the difference-in-difference model to evaluate the effectiveness of the HPR more accurately,further integrates the relevance of each market into the analytical framework and explores the externalitics of the HPR on the real estate rental market and the land market.The empirical results show that the HPR lowers the house price by 10.12%,which is higher than the estimation results of previous studies;and increases the rent by 25.09%,while decreases the residential land price by 9.08%,with no significant impact on industrial and commercial land prices.A series of robustness tests and counterfactual analysis,such as PSM-DID,all support the reliability of the empirical results.The extemnalities of the HPR indicates that the policy is not conducive to improving the welfare of pcople with the rigid housing demand,and may tigger the"soft resistance"of the local government.Therefore,the govermment should focus on how to promote the supply-side structural reform on the land market and real estate market on the basis of strengthening the local tax system.

Tightening Home Purchase Limits

More Chinese cities will limit home purchase to cool the red-hot real estate market In June 2011,the average house price in 100 Chinese cities was 8,856 yuan ($1,373)per square meter.Of these cities,house prices in 75 of them