| According to Tobin’s q theory,Tobin’s q ratio should be the good indicator of firm’s investment.With regard to Chinese housing market,does this theory make sense? Taking into account the characteristic of “policy market”in Chinese housing market,this paper not only studies the Tobin’s q effect in Chinese housing market but also tries to incorporate economic policy uncertainty into the analysis framework of q theory in order to discuss the relationship of economic policy uncertainty,Tobin’s q and housing investment.From the view of theory study,Tobin’s q has a positive effect on housing investment in the model considering economic policy uncertainty,but the effect will be weaker when economic policy uncertainty increases.From the view of empirical study,considering that different economic policy uncertainty may change the influencing degree of Tobin’s q on housing investment,this paper uses Panel Smooth Transition Regression Models and the panel data of 70 large and medium cities to study the possible nonlinear effect and discovers that in the model in which housing investment ratio is regarded as the proxy of housing investment and economic policy uncertainty is regarded as transition variable,Tobin’s q has a positive effect on housing investment,but the effect weakens due to the high economic policy uncertainty,which indicates that the Tobin’s q effect weakens,too.This empirical result is consistent with the theory.The robustness test in which housing starts and land purchasing area are regarded as the proxy of housing investment also proves that the empirical result is robust.Economic policy uncertainty does bring some “bad” effect on market mechanism.Therefore,during policy-making process,government should pay attention to the possible bad effect due to frequent changes of policy and implement some supporting measures to create a good environment for enterprises when a new policy is put into effect. |
