| The real estate industry is a powerful engine promoting China’s economic growth,which plays a crucial role in the rapid development of China’s economy.However,with the continuous expansion of real estate industry,the housing price has also risen for a long time,which has brought a huge potential impact to the healthy operation of the macro economy.The rapidly rising of housing price has forced home buyers to bear heavy financial burden,making it difficult to fully release the potential of domestic consumer demand.What is worse,the high return ratio of real estate investments attracts large amounts of capital and labor resources to be transferred from real economy to real estate sector,which squeezes the development space of real economy.Therefore,the structural imbalance between real economy and virtual economy appears,hindering the advancement of highquality economic development in China.The report of the 19 th National Congress of the Communist Party of China(CPC)pointed out “Meeting the Housing Needs of All People”.“Houses are for Living in and not for Speculation” has become the strategic orientation for China’s economic development,which is an important foundation for ensuring people’s housing demand,coordinating the balanced development of real economy and virtual economy,and unblocking the domestic economic circulation.The macrocontrol of the real estate market is one of the government’s control measures to promote the balanced development of the real estate industry and the real economy under the guidance of “Houses are for Living in and not for Speculation”,and the real estate purchase restriction policy is one of the typical representative control measures.In April 2010,the State Council began to require local governments to implement real estate purchase restriction policies,which opening the period of real estate purchase restrictions.Purchase restriction is a tough controlling measure limiting the number of house purchase,which directly targets the speculative purchase behavior,achieving the balance between supply and demand in real estate Mechanism and Economic Consequences market.This is the unique advantage of purchase restriction compared with other general macro-control measures such as monetary policies.Hence,this paper uses the real estate purchase restriction policy to explore the mechanism and economic consequences of “Houses are for Living in and not for Speculation” on the development of real economy,in order to open the theoretical transmission path between macro real estate market regulation and micro entity enterprise operation decisions,and to provide empirical basis for coordinating the development of real economy and virtual economy.The high-quality development of real economy is the foundation for sustainable and healthy macroeconomic development.However,entity enterprises have been plagued by high costs for a long time.Particularly,China’s economic development has been hampered by the rising of labor costs and financing costs.The excessive expansion of real estate industry has attracted excessive labor and capital resources to transfer into real estate sector,expanding the labor and capital gap in the real economy sector.Hence,the labor costs and financing costs of the real economy have been raised.The implementation of the real estate purchase restriction policies helps to curb the excessive rising of housing price,reducing the pressure on labor’s housing expenditure.In addition,purchase restriction policies promote labor and capital to return to real economy,resulting in the increase of labor supply and capital supply of entity enterprises,which theoretically reduces labor costs and external financing costs of entity enterprises.This paper,based on the strategic orientation of "Houses are for Living in and not for Speculation" and promoting the high-quality development of real economy,constructs a DID model with the implementation of real estate purchase restriction policies in various cities as the exogenous shocks,in order to discuss the impact and mechanism of real estate purchase restrictions on labor costs and external financing costs of entity enterprises,and analyze the change of enterprise value.The main conclusions are:Firstly,real estate purchase restriction policies reduce labor costs of entity enterprises,and the policies mainly reduce the labor costs of entity enterprises by reducing the pressure on residents’ housing expenditure and reducing the labor supply in the real estate field.The heterogeneity tests show that the effect of purchase restrictions on reducing the labor costs of entity enterprises is mainly reflected in the areas with larger real estate market development scale,stronger labor mobility,higher government fiscal surplus,and rapider economic growth,as well as in the enterprises with smaller salary gaps,lower salary stickiness,weaker employee salary negotiation skills and in industries which are not directly related to real estate.In addition,the restriction policies increase the proportion of employees with high education degrees in total employees of entity enterprises.Secondly,real estate purchase restriction policies reduce the debt financing costs and equity financing costs of entity enterprises,and the policies mainly reduce these costs by inhibiting the supply of funds in real estate industry.The heterogeneity tests show that the effect of purchase restriction on reducing the costs of debt financing and equity financing is mainly reflected in the areas with larger real estate market development scale and more active financial market,and reflected in the enterprises with lower information asymmetry,higher dependence on external financing and stronger financing constraints.Besides,the inhibitory effect of purchase restrictions on external financing costs mainly manifests in industries which are not directly related to real estate sector.In addition,when the government fiscal surplus level is lower and the speed of economic growth is slower,the purchase restriction fails to significantly restrain the external financing costs of entity enterprises.Thirdly,the real estate purchase restriction policies improve the value of entity enterprises,which is mainly reflected in enterprises with higher labor costs and higher external financing costs,indicating that purchase restrictions can generate value-added effects by reducing the costs of entity enterprises.Tests based on regional differences show that the role of purchase restrictions in improving entity enterprises value is mainly manifested in areas with faster housing price growth and larger real estate market development scale,while purchase restrictions in first-tier cities,second-tier cities and provincial capital cities fail to significantly enhance the value of local entity enterprises.The heterogeneity analysis based on the enterprise,industry,and government perspectives show that the value-added effect of entity enterprises brought by purchase restrictions is mainly manifested in enterprises with weaker profitability,slower asset turnover and lower cash flow level,and manifested in industries which are not directly related to real estate,and manifested in regions with less pressure of fiscal and economic growth.Mechanism and Economic ConsequencesThe research value of this paper lies in:Firstly,this paper enriches the research on the microeconomic consequences of real estate purchase restriction policies,and connects the logical chain between“Houses are for Living in and not for Speculation” and the development of real economy.Most of existing literatures about real estate purchase restrictions only discuss the role of purchase restrictions on the growth rate of housing prices(Liu et al.,2012;Wang and Huang,2013;Zhang and Zheng,2013;Du and Zhang,2015),or on the macroeconomic operation(Chen et al.,2021;Pi and Song,2021),and on the operating efficiency of real estate enterprises(Liang et al.,2021),while there are few in-depth investigations about the impact mechanism of purchase restrictions on the decision-making of entity enterprises.Based on the perspective of labor costs and external financing costs of entity enterprises,this paper expands the research about the impact mechanism and economic consequences of real estate purchase restrictions on the production and operation activities of entity enterprises.Secondly,this paper broadens the research perspective of the factors that affect the changes in the cost of enterprises,and provides a feasible solution for effectively promoting the cost reduction of entity enterprises.Previous literatures on how government regulations affect the labor costs and external financing costs of enterprises mainly focused on judicial reform(Laeven et al.,2004;Lilienfeld et al.,2012;Shen et al.,2017),tax reform(Wang et al.,2013),monetary policy(Bernanke and Blinder,1988;Bernanke and Gertler,1995),industrial policy(Wu et al.,2019),capital market reform(Pang et al.,2020;Wang and Guo,2021)and other perspectives,which lack investigations based on real estate market regulation.This paper finds real estate purchase restriction policies also help to promote the cost reduction of entity enterprises,enriching the existing research on “Macro and Micro”.Thirdly,this paper provides practical ideas for how to promote the high-quality development of real economy and how to smooth the domestic economic circulation.This paper embeds Chinese institutional elements into the theoretical framework,and conducts a series of scenario analysis based on factors such as marketization,government intervention,salary system,and information environment,which enriches the practical guidelines for coordinating the development between virtual economy and real economy,and provides inspiration for governments to diversify regulation policies.The research innovations of this paper include:Firstly,this paper,based on “Houses are for Living in and not for Speculation”,investigates the influence of real estate purchase restrictions on the costs of entity enterprises,which provides a policy reference basis on micro level to help entity enterprises reduce costs and how to achieve high-quality economic development.Besides,this paper analyzes the impact of real estate purchase restrictions on entity enterprises,rather than real estate enterprises and macroeconomics indicators that previous research focused on,which broadens the research about the mechanism and economic consequences of real estate market regulation.Secondly,this paper uses the staggered implementation of real estate purchase restriction policies in various cities to set up a DID model to carry out empirical tests,which effectively alleviates the endogeneity problems.In addition,this paper examines the mechanism of the real estate purchase restriction policies on labor costs,external financing costs and firm value,which enriches the realization path research and economic consequence research of cost reduction,and broadens the literatures on the “Macro and Micro”.Thirdly,this paper systematically examines the effect of real estate purchase restrictions on labor costs and external financing costs of entity enterprises,clarifying the key realization path for coordinating the development between real economy and virtual economy on micro level,which explains the relationship between real estate market regulation and micro entity corporate behavior,and helps to understand the positive significance of “Houses are for Living in and not for Speculation” in promoting the development of the real economy.At the same time,this paper has provided a reference for how to unblock the domestic economic cycle,which has a fundamentally practical significance. |
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