Causal relationship between construction flows and GDP: evidence from Hong Kong

Tse, Raymond Y. C.; Ganesan, S.

doi:10.1080/014461997372926

Cited by 77 publications

(59 citation statements)

References 16 publications

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“…Wang (2002) and Lean (2001) whose result shows that both public infrastructure and economic growth have significant effects on each other. On the other hand, Tse and Ganesan (1997) results suggest that construction Granger Cause GDP but not wise versa in Hong Kong.…”

Section: Conclusion and Policy Implicationsmentioning

confidence: 54%

The robustness of the causal and economic relationship between construction flows and economic growth: evidence from Western Europe

Wilhelmsson

Wigren

2011

Applied Economics

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Our main objective is to analyse whether we have a problem of parameter heterogeneity across countries and over time in the estimation of the relationship between infrastructure investments and economic growth. The research approach concerning causality and the estimating of the long-run equilibrium is based on the error-correction model. The problem of parameter heterogeneity is handled by the use of interaction terms. The result indicates that residential construction Granger causes Gross Domestic Product (GDP) in the short and long run and it seems likely that the interaction term indicating high unemployment do add some explanation power to the model. This is not true when it comes to infrastructural and other building construction and its impact on economic growth. A high housing stock per capita seems to reduce the short-run effect. This implies that residential construction seems to have a larger effect if the accumulated residential stock is on a low level. The speed of adjustment to long-run equilibrium differs considerably between a country with a low residential capital stock and a country with a high-capital stock. Moreover, high owner occupation rates seem to be associated with a stronger relationship between residential construction and economic growth.

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Section: Conclusion and Policy Implicationsmentioning

confidence: 54%

The robustness of the causal and economic relationship between construction flows and economic growth: evidence from Western Europe

Wilhelmsson

Wigren

2011

Applied Economics

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“…In order to determine construction industry related indicators, time series data is normally used for the analysis (chan, 2001;chan, 2002;tse and Ganesan, 1997;wong et al, 2005) and, in this study, the behaviour of the national economy, post-tsunami disaster, was analysed through the employment of GdP, Gdfcf, construction prices (using the sri Lanka consumer prices index (sLcPI)), balance of payments (boP) and interest rate data. these indicators were selected to represent the national economy to measure impact, as previous studies have established a relationship between the national economy and the construction industry with regard to one or more of above indicators.…”

Section: Methodsmentioning

confidence: 99%

Post‐tsunami Reconstruction in Sri Lanka: Assessing the Economic Impact

Ruddock

Amaratunga

Wanigaratne³

et al. 2010

International Journal of Strategic Property Management

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AbStrACt. the "construction output shock" that was generated by the massive reconstruction programmes after the Indian ocean tsunami in sri Lanka spread through the economic system and was reflected in economic indicators due to the multiple linkages that the construction industry has with other economic sectors. on the ground, it was observed that the prices of construction materials, labour and plant rose suddenly in the affected regions making the reconstruction effort more costly. this paper considers the responses of major economic and construction indicators to the construction shock due to post-tsunami reconstruction and the amount of time needed before they returned to an equilibrium state. Empirical results indicate that the construction output shock had a significant impact on material, labour and equipment price indices in the short run but other indicators showed only a very marginal response indicating that the remoteness of the disaster would have delayed the propagation.

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“…Several studies have focused on the relationship between the oil prices and GDP, and between construction sector and GDP, both globally and for Nigeria specifically (Tse and Ganesan 1997;Hamilton 2005;Lescaroux and Mignon 2008;Bolaji and Bolaji 2010;Olatunji 2010;Syed 2010;Rasmussen and Roitman 2011;Khan et al 2013;Shaari et al 2013;Difiglio 2014;Idrisov et al 2015). However, few empirical studies link the real aggregate GDP, the construction sector output, and the annual oil prices for Nigeria.…”

Section: Literature Reviewmentioning

confidence: 99%

Modeling the Construction Sector and Oil Prices toward the Growth of the Nigerian Economy: An Econometric Approach

2018

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This study empirically examined the interrelationship between the construction sector, oil prices, and the actual gross domestic product (GDP) in Nigeria. Using annual economic data from the National Bureau of Statistics (NBS), the OPEC Annual Statistical Bulletin, and econometric statistics, we found that although very strong positive and significant correlations exist between the construction sector output and total GDP output (0.934), the construction sector output and oil prices (0.856), and the total GDP output and oil prices (0.822), these linear relationships only exist for a short time. However, these relationships do not result in any direct causal influence on each other, except for the uni-directional Granger causal relationship that flows from the total GDP output to the construction sector output, which implies that economic activities of other major non-oil sectors stimulate the construction activities in Nigeria. Thus, we argue that neither the construction sector nor the oil prices directly influence the aggregate economy; rather, the other sectors' activities stimulate the construction sector in Nigeria. Two policy recommendations for achieving the Federal Government's medium term Economic Recovery and Growth Plan (ERGP) are suggested: (1) the Nigerian government should de-emphasize overreliance on the oil sector through policy readjustment and (2) an urgent need for economic diversification in Nigeria exists, since we revealed that an increase in the aggregate GDP output is due to the activities of other non-oil sectors.

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Causal relationship between construction flows and GDP: evidence from Hong Kong

Cited by 77 publications

References 16 publications

The robustness of the causal and economic relationship between construction flows and economic growth: evidence from Western Europe

The robustness of the causal and economic relationship between construction flows and economic growth: evidence from Western Europe

Post‐tsunami Reconstruction in Sri Lanka: Assessing the Economic Impact

Modeling the Construction Sector and Oil Prices toward the Growth of the Nigerian Economy: An Econometric Approach

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