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Capital Inflows and Property Prices: Ethnicity, Education, and Spillovers

Published online by Cambridge University Press:  15 February 2022

Yuk-Ying Chang Open the ORCID record for Yuk-Ying Chang [Opens in a new window]  and
Sudipto Dasgupta Open the ORCID record for Sudipto Dasgupta [Opens in a new window]
Yuk-Ying Chang
Affiliation:
Massey University, Massey Business School y.chang@massey.ac.nz
Sudipto Dasgupta*
Affiliation:
Chinese University of Hong Kong, CUHK Business School
*
s.dasgupta@cuhk.edu.hk (corresponding author)
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Abstract

China has experienced significant capital flight over the past two decades. Despite anecdotal evidence that some of this capital has been invested in foreign residential markets, not much is known about its destination and impact. We examine the effects of capital inflows from China on residential property prices and the real economy in the USA and global metropolitan areas. We show that inflows had significant effects on residential property markets and employment in regions that i) have strong ethnic ties to China and ii) are destinations of Chinese students. We document spillovers to geographically adjacent regions without strong Chinese links.

Type
Research Article
Information
Journal of Financial and Quantitative Analysis , Volume 57 , Issue 8 , December 2022 , pp. 3145 - 3177
Copyright
© The Author(s), 2022. Published by Cambridge University Press on behalf of the Michael G. Foster School of Business, University of Washington

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Footnotes

We thank Cristian Badarinza (the referee) and Jennifer Conrad (the editor) for very helpful comments and suggestions that greatly improved the article. We also thank Sheridan Titman for his helpful discussions. All errors are the authors’ own. Chang thanks Massey University’s Business Impactful Research Fund for funding.

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