Empirical analysis reveals an inverted U-shaped relationship between housing prices and innovation in manufacturing enterprises, suggesting implications for economic development.
The manufacturing industry is the “ballast stone” of China’s economy, and innovation in the manufacturing industry plays a key role in promoting high-quality economic development and propelling the modernization drive. Based on relevant theoretical analysis, this study uses data from 441 manufacturing companies (ME) listed on the Shanghai and Shenzhen A-shares in China from 2013 to 2022 to empirically analyze the impact mechanism of housing prices (HP) on innovation in manufacturing enterprises (IME) by constructing an econometric model. The results of the benchmark regression model indicate that in the short term, the rise of housing prices is beneficial for manufacturing enterprise innovation. However, as housing prices continue to rise, high housing prices can have a suppressive effect on innovation, indicating an inverted U-shaped relationship between the two variables. Mediating effect analysis shows that housing prices have different effects on enterprise innovation through resource allocation (RA), financial constraints (FC), and real estate investment (REI). Heterogeneity analysis reveals that in the long term, the inhibitory effect of housing prices on enterprise innovation is more significant in eastern cities than in central and western cities. Our study recommends actively stabilizing housing prices, establishing a sound real estate supervision system, and strengthening independent innovation.
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Xiong et al. (2025) studied this question.
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