House Price, Ownership Type and Firm Innovation

Abstract

This paper chooses the data of high-tech enterprises in China from 2007 to 2014, and investigates the impact of house price on firm innovation. The conclusion is that the house prices are significantly negatively related to the firm innovation, and compared to the prices of the operating buildings and the office buildings, the negative effect of the increasing price of commercial buildings as a whole, residential buildings (large categories), or other commercial building in the similar category is more significant. Besides, the paper also found that the negative effect on state-owned enterprise innovation is more significant than the non-state-owned enterprise innovation. The conclusion of this paper has a certain guiding significance for exploring the negative impact of rising house prices on the enterprise innovation.

Housing prices and green innovation: evidence from Chinese enterprises

“…The empirical findings support the hypotheses proposed in this paper, demonstrating that rising housing prices have a significant positive effect on corporate green innovation. This finding contradicts previous studies that suggest rising housing prices hinder enterprise innovation (Wang, 2014(Wang, , 2017Zhao et al, 2016Zhao et al, , 2019, while aligning with research that highlights the positive impact of urban housing prices on city and enterprise innovation (Chaney et al, 2012;Wang, 2020;Lin et al, 2021). Therefore, the empirical results provided in this study enhance the understanding of the influence of housing prices on firm innovation.…”

“…Secondly, this paper examines the differential impact of housing prices on corporate green innovation based on variations in enterprise characteristics and regional differences. Previous studies have suggested that the inhibiting effect of housing prices on enterprise innovation is more pronounced in state-owned enterprises (Wang, 2017; Zhao et al ., 2019). However, the findings of this paper contradict this conclusion.…”

“…Table 7 shows the heterogeneity test based on firm differences. Specifically, model (1) and model (2) distinguish state-owned enterprises from non-state-owned enterprises based on the type of enterprise ownership (Wang, 2017). In model (3) and model (4), enterprises are divided into main board-listed and non-main board-listed (the small and medium-sized board, science and innovation board, and growth enterprise board).…”

“…For model selection, this paper aims to estimate the causality in panel data. Referring to the research method proposed by Wang (2017) and Jiang et al (2022), this paper adopts a bidirectional fixed-effect model to study the impact of urban housing prices on corporate green innovation, in which the fixed effects of time and individual firms are controlled to avoid missing variable bias. This makes the regression results more robust (Jiang et al, 2022).…”

“…Similarly, Zhao et al (2016) found that increasing housing prices have a detrimental effect on enterprise innovation, as companies shift their investment focus toward real estate, thereby diverting resources away from innovation-related activities. Based on data from Chinese high-tech enterprises, Wang (2017) found a significant negative impact of housing prices on enterprise innovation. Additionally, Zhao et al (2019) conducted an empirical study revealing that rising housing prices significantly hinder innovation activities among listed companies.…”