An Empirical Research On The Relationship Between Real Estate Industry And Economic Growth

In view of the complex status quo of China’s real estate industry, and the situation that China has entered " The new economic norm", it is in urgent need of research for China that how to continue to maintain economic growth at high speed. In this context, it is urgent to do a systematic review and clarify the relationship between the real estate industry and economic growth in the past 10 years. So we can provide empirical evidence for the country to formulate relevant policies. Via healthy and order development of the real estate industry, we can achieve economy growth stably and rapidly.Therefore, based on the systematic theory, we firstly do the statistical analysis of the status quo of China’s real estate industry in a full range; then we calculate and analyze the contribution degree of the real estate investment to economic growth in the sample period using the panel data of provinces and cities in China; in the end, we measure the effect of real estate on the related industries through input-output analysis. The main conclusions are as follows:Through a systematic analysis of the literature, this paper argues that, the development of the real estate industry has a certain stage. In the period of rapid growth it can act as a dominant industry in a country. Through the analysis of the current development of the real estate industry we conclude that, the development of real estate in some areas is still in the initial stage, there is some room to grow. But in some areas, the ratio of housing price to income and other indicators show that the real estate market has a degree of bubble. It can be seen that the development of the real estate industry is seriously regional imbalanced.Based on the extended C-D function, multiple regression model is established between real estate investment and economic growth. Then we select the panel data of 31 provinces in China during 1997-2012, extract the principal components, establish the principal component regression, and at last get the regression coefficient of the original variables. The results show that, the real estate investment has significant effect on economic growth, but its affect of promotion to economic growth is less than the fixed asset investment in addition to real estate investment.By the input-output tables in 2007 and 2010 of our country, we calculate direct consumption coefficient, total consumption coefficient, direct distribution coefficient and total distribution coefficient and so on of the real estate industry, then we estimates the leading role of the real estate industry to related industry. According to the results, related industries of real estate industry is numerous, it has long industrial chain. In the economic system, the majority of the industries are related directly to the real estate industry. But the direction and size of the relationship is different. Among them, the pulling effect of real estate industry to final demand industry is significant. The pushing effect of real estate industry to life service industry is significant, such as wholesale and retail trade, resident services and so on.Finally, based on the empirical analysis, this paper puts forward some policy recommendations on promoting the healthy development of real estate industry and achieving stable and rapid economic growth.