Macroeconomic policy, real estate investment structure, and manufacturing investment - The empirical analysis based on panel data model

Based on panel data of 30 Chinese provinces, autonomous regions, and municipalities during 2003-2017, and established econometric models - random effects model and fixed effects model by the measurement software Stata 15.0 to analyze the influence of real estate investment on manufacturing investment. This study finds that the structure rather than the total investment amount represents the key problem in real estate investment. This structure, with respect to land cost, will have a significant negative impact on manufacturing investment, with a more negative impact under a looser monetary policy. Therefore, the study concludes that a change in real estate investment structure is required, with a focus on finding the new growth point for real estate market development in housing stock, strengthening the control of the land market to prevent the excessive flow of capital, and balancing the capital allocation between the real estate industry and the manufacturing industry in order to promote their coordinated development.