Competitive advantages and the proximity of investment: evidence from Hong Kong-listed real estate development firms in Mainland China

Song Shi, Shuping Wu and Zan Yang

Journal of Property Research, 2024, vol. 41, issue 1, 1-22

Abstract: This study examines the investment behaviour of Hong Kong-based real estate firms in Mainland China. Using a sample of individual land transactions, we find that firms with higher value of growth options, as perceived in the capital market, are more likely to invest actively and further away from their home base. However, over time, Hong Kong developers tend to decrease their level of activity in Mainland China, indicating that the ‘liability of foreignness’ becomes a significant challenge. Our findings highlight the importance of balancing strategic expansion with the inherent risks of operating in distant emerging markets.

Date: 2024
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DOI: 10.1080/09599916.2023.2279761

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