The Influence Of The Institutional Environment On The Geographical Choice Of Real Estate Enterprises Across Regions

Real estate industry has grown rapidly and has become a hot point in investment since China canceled the housing material object distribution system in 1998.But because of the characters of real estate companies——the key production resource that this industry based on is the land which is unmovable,nonrenewable and region-dependent,so the companies need to invest across region to obtain more lands in order to get economies of scale.With the rapid growth of real estate industry,Chinese government implements the micro-regulation continually.The real estate industry need to solve the problem that How to make the appropriate location choice and accomplish location diversity in one excellent and low risk way while facing the changeable market.Real estate industry is sensitive to government's policy and institutions have a great impact on it.It arouses the stdudy of institutional environment and institutional distance how to influence the location choice because of the significant institution difference in China.What's more,the political connection which is a kind of informal alternative protection mechanism,with the investment experiences which help the companies reduce search cost and information asymmetry,how to influence the location choice and whether if they can moderate the effect between institutional environment and location choice.It arouses another study.Using data of China's real estate A-share listed companies' first entry in any province in China in 2004 to 2015,we did the empirical analysis.We found that the better institutional environment of a target location is,the higher probability it is chosen,and the bigger institutional distance between target location and companies'register area,the lower probability it is chosen.What's more companies are more willing to come from register area which has bad institutional environment to target location which has good institutional environment and not willing to do the opposite thing.We also found that the effects of institutional distance on the location choice are different from whether it is from good to bad institutional environment or from bad to good institutional environment.In addition,we found that political connection and relevant investment experience moderate the relationship of institutional environment,institutional distance and location choice by reducing the pressure comes from institutional environment.This paper makes some contribution on real estate companies' investment strategy management.