Does the housing purchase restriction policy promote entrepreneurship? Evidence from China

Deng-Kui Si, Meng Wang and Yong Yu

China Economic Review, 2025, vol. 90, issue C

Abstract: This paper examines the Housing Purchase Restriction (HPR) policy implemented in selected Chinese cities in 2010 as an exogenous shock and finds that the policy significantly promotes entrepreneurship. The effect is more pronounced in cities with higher economic levels, robust financial systems, intense bank competition, and active venture capital activities. Restricting housing speculation and fostering talent agglomeration are the two main mechanisms through which the HPR policy promotes entrepreneurship. Channel analysis reveals that the HPR policy mainly supports entrepreneurship in small-scale businesses and high-tech industries. Furthermore, our study sheds light on how the HPR policy affects entrepreneurial innovation. Our findings contribute fresh insights to the understanding of how the housing market collectively shapes entrepreneurship.

Keywords: Housing purchase restriction policy; Entrepreneurship; Housing speculation; Talent agglomeration (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:90:y:2025:i:c:s1043951x25000173

DOI: 10.1016/j.chieco.2025.102359

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