Asia-Pacific Journal of Business (아태비즈니스연구)

KNU The Institute of Management & Economy Research (강원대학교 경영경제연구소)
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The Impact of Housing Price on the Performance of Listed Steel Companies Evidence in China

  • Huang, Shuai (Department of Real Estate Studies, Konkuk University) ;
  • Shin, Seung-Woo (Department of Real Estate Studies, Konkuk University) ;
  • Wang, Run-Dong (Department of Real Estate Studies, Konkuk University)
  • Received : 2020.05.30
  • Accepted : 2020.06.25
  • Published : 2020.06.30
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Abstract

Purpose - This study explores the impact of the real estate industry on related industries for the perspective of Chinese steel companies. Design/methodology/approach - The impact of housing prices on the 41 listed steel companies' performance was analyzed by using the panel data model. We used two kinds of housing price indexes that are set in the panel data models to estimate the range of the real estate market, driving the performance growth of steel listed companies. Moreover, the net profit of steel companies is used as the dependent variable. To test the stability of the model, ROA used as a dependent variable for the robustness test. Also, to avoid the time trend of housing prices, this paper selects the growth rate of housing prices as the primary research variable. After Fisher-type testings, there is no unit root problem in both independent and dependent variables. Findings - The results indicated that the rise in the housing price has a positive influence on the steel company performance. When the housing price increases by 1%, the net profit of steel enterprises will increase by 5 to 20 million yuan. Research implications or Originality - In this paper, empirical data at the micro-level and panel model are used to quantify China's real estate industry's driving effect on the iron and steel industry, providing evidence from the microdata level. It helps us to understand further the status and role of China's real estate industry in the economic structure.

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