The Analysis Of The Relationship Between The Urbanization Of Liaoning Province And Real Estate Investment

Urbanization is the inevitable trend of human progress and social development, andthe level of urbanization is one of the important symbol of measuring the national orregional economic development degree. The process of urbanization and its degreeenable us to judge a country’s or region’s economic development. In2011, China’surbanization level has passed50%, which marked the beginning of our country into anew growth phase,a predominantly urban society. It is estimated that China’surbanization level will reach65%by the middle of the century. The improvement ofurbanization requires coordinating development from lots of factors.And the real estateindustry has played a positive role in promoting the urbanization process.The relationship between urbanization and real estate industry is mutual promoting.As the pace of urbanization accelerating, urban population increase,which means theincreased demand for real estate industry.It also directly contributes to the increase ofreal estate investment. And the increase of real estate investment will also improve livingenvironment and increase employment,which play a positive role in promoting theurbanization process.Liaoning Province is the northeast old industrial base, and is an important junctionof the northeast China economic zone and Bo sea economic zone. The healthydevelopment of the urbanization process and economy have significant effects onregional economy. The urbanization process of Liaoning province was from acceleratingand slow developing to steady developing. Generally speaking,urbanization level ofLiaoning province is better than the national level,but there are many problems to besolved in the process of urbanization.The real estate industry of Liaoning province starts late, but the overall developmentsituation is good, and the development speed is fast. The proportion of real estatedevelopment investment in the whole society fixed asset investment has increased yearby year, and its contribution to regional economy has become greater. The real estateinvestment has become the pillar industry of the regional economy. From the perspectiveof real estate development investment, the development of the real estate industry in Liaoning province is better than the national level. However, the real estate investmentgrows too fast in some cities, which leads to many problems,such as soaring houseprices, unequal distribution of investment capital and waste of resources and so on.Therefore, it is significant to coordinate the relationship between rapid development ofreal estate investment and urbanization.Based on the existing literature about the rapid development of real estateinvestment and urbanization in our country, combined with the actual developmentsituation of Liaoning province, this article analyzes the relationship between urbanizationand real estate investment in Liaoning province. Starting from the relationship betweenurbanization and real estate investment as well as the related theory, this paper studiescurrent situation of urbanization and real estate investment of Liaoning province. Inempirical aspect, this paper uses the cointegration test, error correction model andGranger causality test. Results manifest that when the lag period is1year, the level ofurbanization in Liaoning province is not the Granger cause of real estate investment, butthe development of real estate investment is the Granger cause of urbanization.Until thelag period is3, both urbanization and real estate investment are Granger cause for eachother, and there is a long-term cointegration relationship between each other. Thenestablish the vector autoregressive model (VAR), and use impulse response function tofurther analyze the relationship between the two variables.After time series analysis, this paper uses1995-2011panel data of14cities inLiaoning province to establish panel data model, in order to concretely analyze regionalurbanization and real estate investment.Finally, make a summary of the important conclusions of this paper, and putforward policy Suggestions in view of the problems that exist in the reality.