Housing market networks in China's major cities: a conditional causality approach
International Journal of Emerging Markets
ISSN: 1746-8809
Article publication date: 17 February 2021
Issue publication date: 29 November 2022
Abstract
Purpose
To explore the state of this conditional Granger causality when other cities are not factors, we investigate housing market networks in China's major cities by using a combination of conditional Granger causality and network analysis.
Design/methodology/approach
Although housing market networks have been well discussed for different countries, the question of housing market networks in China's major cities based on the conditional causality perspective has yet to be answered.
Findings
We discover that second-tier cities are more influential than first-tier cities. Although the connectivity of the primary housing market is more complex than the diversified connectivity observed in the secondary housing market, both markets are scale-free networks that exhibit high stability. Moreover, we reveal that geographic conditions and economic development jointly determine the housing market's modular hierarchical structure. Our results provide meaningful information for both Chinese policymakers and investors.
Originality/value
By excluding the influence of other cities, our conditional Granger causality identifies the true casual relation between cities' housing markets. Moreover, it is the first paper to consider the primary housing market and secondary housing market separately. Specifically, Chinese prefer new house rather than second-hand house from both speculative and self-housing. Generally speaking, the new house price is lower than the second-hand house price since the new house is off-plan property. Therefore, understanding the difference between primary and secondary housing markets will provide useful information for both policymakers and speculators.
Keywords
Acknowledgements
Funding: This research was supported by the Fundamental Research Funds for the Shenzhen University, Grant Number 2020082615222, Fundamental Research Funds for the Central Universities, Zhongnan University of Economics and Law, Grant Number 2722020PY037 and Fundamental Research Funds for the Jiangxi University of Finance and Economics, Grant Number 012270639.Declaration of Interest: The authors declare no conflicts of interest. The founding sponsors had no role in the design of the study: in the collection, analyses or interpretation of data, in the writing of the manuscript or in the decision to publish the results.
Citation
Yang, L., Yuan, N. and Hu, S. (2022), "Housing market networks in China's major cities: a conditional causality approach", International Journal of Emerging Markets, Vol. 17 No. 9, pp. 2166-2185. https://doi.org/10.1108/IJOEM-05-2020-0573
Publisher
:Emerald Publishing Limited
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