Research On The Impact Of Rising House Prices On Manufacturing Output

Real estate and manufacturing are two very important sectors in China’s macroeconomic system.Since the reform in 1998,China’s real estate industry has achieved tremendous development.At the meantime,the real estate industry has driven the output growth of many upstream and downstream industries,including manufacturing.In recent years,along with the continuous rise in housing prices,real estate has the attributes of financial investment in addition to the attributes of durable consumer goods.Therefore,the scope and means of the impact of rising housing prices on the manufacturing industry have also changed to a certain extent compared to the initial stage of the development of the real estate industry.So,what are the current ways and mechanisms of rising housing prices in China that affect manufacturing output?What is the dynamic process of this influence over time? Moreover,within the manufacturing industry,is there any difference in the impact of rising house prices on different manufacturing industries?In order to answer the above questions,this paper studies the impact of rising house prices on manufacturing output from both theoretical and empirical aspects.First of all,the development status of the real estate industry and manufacturing industry was sorted out,and it was found that housing prices have continued to rise in an all-round way.The scale of real estate investment has expanded.And the tone of real estate regulation and control policies have frequently changed.At the same time,manufacturing output and investment continue to increase,but there have also been signs of reduced output and investment growth and rising costs,and the international competition facing the manufacturing industry has intensified.Secondly,drawing on previous theories and research achievements,the paper analyzes the impact of rising housing prices on manufacturing from five aspects: easing corporate financing constraints,industrial linkage effects,triggering cost increases in manufacturing companies,squeezing out corporate credit funds,and manufacturing companies investing in real estate.Finally,the monthly time series data from July 2005 to December 2019 is used to construct a state space model in which rising housing prices affect manufacturing output.And based on the Kalman filter algorithm to estimate the time-varying parameter sequence analysis of the impact of rising house prices on manufacturing output,the dynamic impact process is analyzed.Afterwards,the samemethod was used for empirical analysis of different manufacturing industries.The research conclusions of this paper mainly include:(1)From the perspective of the impact mechanism,the rise in house prices has both a promoting effect and a suppressing effect on the output of manufacturing companies.The final impact on output depends on the power comparison of these two effects,that is,the net effect.Among them,the promotion effect includes alleviating corporate financing constraints and industry-related effects.The restraining effect includes triggering rising costs of manufacturing companies,squeezing out corporate credit funds,and attracting companies to withdraw internal funds to invest in real estate.(2)Empirical results show that from a macro perspective,the net effect of rising house prices on manufacturing output is still a driving force.However,this driving effect is gradually decreasing and approaching zero,indicating that the inhibitory effect of rising house prices is gradually increasing.(3)From the perspective of different manufacturing industries,rising housing prices have a boosting effect on the output of the non-metallic mineral products industry,which is highly connected to the real estate industry.However,it has an obstacle effect on the output of wine,beverage and refined tea manufacturing industry which is not closely related to the real estate industry.Based on the research conclusions,the policy recommendations are as follows:build a long-term mechanism for real estate regulation and control,and accelerate the improvement of real estate tax reform.Expand financing channels for physical industries and improve corporate financing efficiency.Improve the profitability of manufacturing enterprises,and improve the level of manufacturing industry profits.