The relationship between real estate investment and economic growth in China: a threshold effect

摘要

Based on panel Granger approach, we use the panel data of 30 provinces in China over the period from 1999 q1 to 2007 q4 to implement a preliminary empirical test on the relationship between real estate investment and GDP growth. We find that East, Middle and West parts of China behave remarkably different. After further analyses on two extreme panels, one of which is made up of provinces whose per capita GDP is higher than $2,000, the other one lower than $1,000, we confirm the potential threshold effect of real estate investment on its contribution to GDP growth, and in particular, real estate investment cannot exert a significant effect on GDP growth when per capita GDP is lower than $1,000.