How strong are the linkages between real estate and other sectors in China?

Steven Chan, Gaofeng Han and Wenlang Zhang

Research in International Business and Finance, 2016, vol. 36, issue C, 52-72

Abstract: International experience points to the critical role of stable property markets in maintaining financial stability. This paper investigates the real and financial linkages between real estate sector and other sectors. The real linkage based on input–output analysis shows that the linkages have strengthened. The financial linkages in terms of credit risk spillovers across sectors are studied by using DAG method and SVAR. We find that that credit risk in the real estate sector has large-scale spillover effects onto other sectors. Consequently, shocks to the property market could have much larger impact on the Chinese economy than suggested by headline figures.

Keywords: IO analysis; Default likelihood; Financial linkages; DAG; Structural VAR (search for similar items in EconPapers)
JEL-codes: C4 C5 C6 G3 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:36:y:2016:i:c:p:52-72

DOI: 10.1016/j.ribaf.2015.09.018

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