Capital Inflows and Property Prices: Ethnicity, Education, and Spillovers

Sudipto Dasgupta and Yuk Ying Chang

No 16146, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: China has experienced significant capital flight over the last two decades. Despite anecdotal evidence that some of this capital has been invested in foreign residential markets, not much is known from academic research about its destination and impact. We examine the effects of capital inflows from China on residential property prices and the real economy in the U.S. and global metropolitan areas. We show that inflows had significant effects on residential property markets and employment in regions that (a) have strong ethnic ties to China and (b) are destinations of Chinese students. We document spillover effects to other regions.

Keywords: Capital flight; Housing prices; Employment; Deposits; Ethnic ties; Educational links; Spillovers (search for similar items in EconPapers)
JEL-codes: F20 F21 G12 G15 R00 (search for similar items in EconPapers)
Date: 2021-05
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