An Empirical Study On Impact Of Soaring House Prices On Manufacturing Investment

The real estate market has been regarded as an irrational market in China.From 2007 to 2017,the real estate prices in China rose rapidly three times,each of the rapid rises in housing prices is highly controversial.One side is the prosperity of the real estate market,on the other side is the dilemma of the real economy represented by the manufacturing industry.The impact of the over-prosperous real estate market on the real economy is receiving more and more attention.This article is based on the industry data of Shanghai and Shenzhen stock exchanges from September 2014 to September 2016,using difference-in-differences method to study the impact of soaring house prices on investment in manufacturing enterprises.First,we found that the soaring house prices has a significant inhibitory effect on the investment of manufacturing enterprises,Adjusting the dependent variable,adjusting research object and changing the sample interval does not affect the robustness of the conclusion.Second,the effect of rapidly rising house prices on manufacturing investment is greater than the effect on the investment of finance,it means that the irrational rise in housing prices has caused a greater impact on the real economy.Finally,based on the heterogeneity perspective of manufacturing enterprises,this paper also examines the differences in the investment inhibitory effects of rapidly rising house prices on high-tech manufacturing and non-high-tech manufacturing.The results show that soaring house prices will be more detrimental to high-tech manufacturing enterprises investment.In general,the soaring house prices have a negative effect on the investment activities of manufacturing enterprises.If the government did nothing,soaring house prices would put the economy at risk and undermine the healthy development of the national economy.Therefore,the government should take measures to effectively control the housing prices in a reasonable range,to provide a stable environment for the real estate market,and also to create suitable external conditions for the real economy.