Urban Housing Prices and Total Factor Productivity: “Crowdingout Effects” and “Sorting Effects”
- YU Yongze & LI Qihang
- YU Yongze (Nanjing University of Finance and Economics, 210023)LI Qihang (Shandong University of Finance and Economics, 250000)
The paper mainly focuses on the difference in the effect of urban housing prices on the overall total factor productivity (TFP) and individual corporate TFP, especially on the “sorting effects” and the “reversed transmission of pressure effects” of rising urban housing prices on industrial enterprises. It uses instrumental variables to analyze the data of 230 prefecture-level cities and individual industrial enterprises to check the varying influence of housing prices on the city's overall TFP as well as individual industrial enterprises' TFP. The empirical results show that high housing prices significantly inhibit the growth of the city's overall TFP, mainly due to the “crowding-out effects” and the “resource mismatch effects” of real estate investment on investment in the real economy. Under the “sorting effects” of the fast-growing urban housing prices on industrial enterprises, the industrial enterprises located in cities where housing prices soar tend to have a high TFP. There will be an inverted U-shaped relationship between high housing prices and industrial enterprises' productivity when retained enterprises fail to offset the loss of efficiency caused by rising house prices through the “reversed transmission of pressure effects”. Due to “lock-in effects” of soaring urban housing prices on service enterprises and “erosion effects” on productivity, industrial enterprises in cities with soaring or already sky-high housing prices tend to have a high TFP while these cities' overall productivity is low. Robustness analysis also supports the above conclusions.
JEL：R31, D21, O30
- Urban Housing Price, Total Factor Productivity, Crowding-out Effects, Sorting Effects