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Business & Economics

DOES AGGLOMERATION OF SCIENCE AND TECHNOLOGY SERVICE INDUSTRIES PROMOTE RISE IN HOUSING PRICE?
Jinhui Dong, Changheng Zhao, Fan Lin

ABSTRACT. Housing prices in Chinese cities present an irrational rising tendency in the urbanization progress, which aggravates the real estate bubble and attracts extensive concern from the government and economists. To explore the influential factors of rising housing prices in Chinese cities, using related data on 264 prefecture-level cities during 2005-2017 and the housing price equilibrium model under skill-oriented labour flow, the influence mechanism of the agglomeration of science and technology service industries on housing price was analysed. Results show that the agglomeration of science and technology service industries has a positive effect on housing prices. The urban per capita wage restricts the agglomeration of science and technology service industries to boost the rise in housing prices, which has a certain threshold effect. In the meantime, the features of the effect of agglomeration of science and technology service industries features spatial heterogeneity presents high in the west and low in the east in the aspect of geographical distribution and shows a general declining tendency in time dimension. The conclusions indicate that preventing the risk of housing price bubble than solely controlling the house price accords with China's economic development situation. Moreover, it can also facilitate the government to adjust policy orientation, enhance the support for emerging industries, such as science and technology service industries, and support high housing prices by elevating actual wage level and effective housing demand to avoid the irrational burst of housing price bubbles.

KEYWORDS:  agglomeration of science and technology service industries, housing price, equilibrium model, threshold effect.

JEL classification:  J4, R3, C23.