...Front. Econ. China 2010, 5(1): 25–51 DOI 10.1007/s11459-010-0002-7 RESEARCH ARTICLE Huayi Yu China’s House Price: Affected by Economic Fundamentals or Real Estate Policy? © Higher Education Press and Springer-Verlag 2010 Abstract Many theory and empirical literature conclude that house price can reflect economic fundamentals in the long-term. However, by using China’s panel data of 35 main cities stretching from 1998 to 2007, we find that there is no stable relationship between house price and economic fundamentals. House price has deviated upward from the economic fundamentals since government started macro-control of the real estate market. We consider that the mechanism between the house price and economic fundamentals is distorted by China’s real estate policy, especially its land policy. Meanwhile the policy itself is an important factor in explaining the changes of China’s house price. Then we estimate the dynamic panel data model on house price and the variables which are controlled by real estate policy. The result shows: land supply has negative effects on house price; financial mortgages for real estate have positive effects on house price; and the area of housing sold and the area of vacant housing, which reflects the supply and demand of the housing market, has negative effects on house price. We also find some differences in house price influence factor between eastern and mid-western cities. Finally, we propose policy suggestions according to the empirical...
Words: 11366 - Pages: 46
...Assignment 5 Valerie Lagana Strayer University Eco550 – Economics for Managers September 5, 2011 Question: Describe the changing economic variables in China that influenced McDonald’s expansion strategies. The main changing economic variables in China that influenced McDonald’s Expansion were the increase in GDP and the economic stimulus package. In 2007, the increase in GDP showed a level of strong jobs in China as well as increase income for the Chinese (Farnham, 2010). This allowed the Chinese to spend more money on eating out at restaurants which gave McDonald’s a great opportunity for expansion. In addition, the Chinese government had a stimulus package after the economy dropped in 2008. The stimulus package included building more highways which allowed the Chinese to be accessible to the drive through window opportunity that McDonalds was able to offer as part of their expansion. Question: What factors led to the Mexican currency crisis and peso devaluation in 1994? The factors that led to the Mexican currency crisis and peso devaluation were the Appreciation of the exchange rate, falling interest rates, and the foreign savings. The appreciation of the exchange rate resulted in a decrease in savings with an increase in investment due to the expansion of credit without any federal regulations (Farnham, 2010). The falling interest rates were a result of the appreciation of the exchange rate attracting private capital via privatization of banks and...
Words: 915 - Pages: 4
...Impact of International Trade Fair Participation on Export – An Empirical Study of China Based on Treatment Effect Model Silu Shrestha, Zhuo Li* Economics and Management School, Wuhan University, Wuhan, Hubei, China This paper examines the impact of international trade fair participation on export of China, explained by participation in overseas international trade fairs organized by China Council for Promotion of International Trade (CCPIT). The findings of this paper suggest that the international trade fair participation results the increment in export. For the export study the macro economic characteristics of destination and exporting country are considered along with trade fair participation. On the basis of treatment effect model this study analyze that international trade fair participation as an important factor to enhance export of the country. Like wise this model also explains the county characteristics, which determines the international trade fair participation. Overall this paper focuses on international trade fair participation as one of the important factor along with other factors positively affecting the export of China. Keywords: China export, international trade fairs, and treatment effect model. JEL Classifications: F14, F19, C21 ___________________________________________________________________ *Zhuo Li (corresponding author), Email: lizhuo@whu.edu.cn, tel no: +86 27 68753023 Introduction Trade fair is an important medium where different...
Words: 5462 - Pages: 22
...countries to enter is a critical decision and needs to be made with considerable care and deliberation. Initial market entry decisions have typically focused on country evaluations based on macro-economic data. While appropriate in providing an initial screening of countries, other factors, notably contextual factors, can provide important insights in assessing international market opportunities. The purpose of this paper is to examine the impact of context at four distinct levels. Design/methodology/approach – The literature on the influence of context on consumption and purchase behavior is reviewed to provide a framework to understand contextual factors as a means to refine entry strategy and develop effective segmentation strategies. Findings – A wide range of contextual factors exert influence on consumption choices and contribute to within-country heterogeneity. These are typically examined at the macro-level, but also need to be examined at the meso-level, micro-level and situational level to fully assess market opportunities and establish viable market segments. Practical implications – Examination of contextual factors provides a richer and deeper understanding of which international markets to enter and which segments to target. Within-country cultural diversity, dramatic economic and regional disparities and marked differences in the infrastructure need to be assessed. In particular, examination of contextual factors helps to shed light on heterogeneity within countries...
Words: 6454 - Pages: 26
...the Impact of Macro-economic Variables on the GDP of China and India by Manish Chandi Shrestha Submitted to the Program of Analytics in the Postgraduate Division of the Business School As part of the requirement for Master of Business Administration at Bournemouth University March, 2015 Contents List of acronyms i List of figures and tables ii Abstract 1 Introduction 1 Methodology 2 Data source 3 Findings 3 Interpretation 4 Conclusion 9 References 10 Appendices 11 List of Acronyms GDP Gross Domestic Product IMF International Monetary Fund IQR Inter Quartile Range ANOVA Analysis of Variance BLUE Best Linear Unbiased Estimator VIF Variance Inflation Factor List of Figures and Tables 1. Correlation Analysis of China 4 2. Correlation Analysis of India 4 3. Beta coefficients for China and India 5 4. Revised Beta Coefficients for China 5 5. Comparison between Predicted and Actual GDP for China 6 6. Comparison between Predicted and Actual GDP for India 7 7. Test of Normality of Error for China and India 7 8. Residual Statistics for India 8 9. Residual Statistics for China 8 10. Collinearity Statistics for India and China ...
Words: 3366 - Pages: 14
...Brazil Russia India China Conclusion Appendix Sources Contacts 4 6 7 10 15 19 24 29 31 33 34 Executive Summary The BRIC block has emerged as the economic power house of growth for the automotive industry through the last decade. What started as an exploration of new/extra markets for car sales in the early 90s has gone on to become the mainstream market of the new millennium. Supported by attractive macro-economic factors such as growing economic activity, urbanization, rising household incomes, developing credit markets and very low car density, the BRIC countries currently make up for the top 7 automotive markets globally. The BRIC block has been strongly growing for over 10 years; with 3 of 4 BRIC economies surging ahead even during the 2008 economic crisis. So that prompts us to ask how the dynamics have transformed over the years. What were the major drivers of growth in car sales in the last decade and into the future? Is the current slowdown a blip or is it here to stay? More importantly, what does the growth dynamics in China, Brazil and Russia mean to the Indian automotive market? We offer our perspective on the impact of macroeconomic factors on car sales in the BRIC block between 2001 and 2011. Below are the key findings of our analysis: 1. Car sales in Brazil, Russia, India and China grew at a CAGR of 8.8%, 5.7%, 14.5% and 34.3% respectively as against a globalcar sales average of 4.0% between 2001 and 2010. 2. In 2011, weak macro-economic conditions in Brazil...
Words: 2118 - Pages: 9
...Economic Analysis Exercise I. Discuss how the two cases in this chapter illustrate the major theme of this text: Changes in the macro environment affect individual firms and industries through the microeconomic factors of demand, production, cost, and profitability. Drawing on current business publications, find some updated facts for each case that support this them. Drawing on current business publications and the two cases in this chapter it is prevalent that several changes in the macro environment have had an effect on the profitability of individual firms and industries. The text states that (Farnham, 2010 page 459), downturns in economic activity forced all the fast-food companies to develop new strategies. During this economic downturn McDonald’s was one company in particular that has developed strategies that were influenced by microeconomic changes. A great example is when McDonald’s entered the Chinese market they had to take into consideration consumer taste and acceptance in China. They had to decided whether or not to have the menu in Chinese or English and whether or not to take on the American menu or add more Chinese influenced menu items. Cost also played a part in the China market. Beef was much more expensive and so therefore could only reach a certain percentage of the people. Half of McDonald’s sales in China had been of chicken product with beef only making up 35 percent (Farnham, 2010). II. Compare and contrast McDonald’s strategies in China with...
Words: 664 - Pages: 3
...Glenda Stahl 03/13/16 Week Eight Homework What is economic growth and how do we use GDP to measure an economy? Economic growth is measured by the value of all the products manufactured and sold in a country over the course of one year along with everything people do and get paid for. There are four categories that create GDP: consumers, investments, governmental spending and other companies that buy from another country. GDP measures income, but not equality, it measures growth, but not destruction, and it ignores values like social cohesion and the environment. However, there are countries that are trying to include social cohesion and the environment because it does have an effect on economic growth. What cause or contribute to the growth of an economy? Economic growth is measured by real GDP growth where the ability of a country to increase the value if it’s production of goods and services after removing the effects of inflation. When people earn more money they buy more products which results in economic growth. Economic growth is important for a country because it leads to a better standard of living for all its citizens, even the poor. Countries with a good economy can offer better health care services, safer working conditions and spend more on insuring a cleaner environment. Also, economic growth allows countries to reinvest money into areas that will promote future growth such as education, technology, capital and infrastructure. What is the rule of 70?...
Words: 690 - Pages: 3
...A MODEL OF OPTIMAL INTERNATIONAL MARKET EXPANSION THE CASE OF US HOTEL CHAINS EXPANSION INTO CHINA E. Hachemi Aliouche, Ph.D. Associate Professor, Hospitality Management Whittemore School of Business and Economics UNIVERSITY OF NEW HAMPSHIRE, USA and Udo Schlentrich, Ph.D. Associate Professor, Hospitality Management Whittemore School of Business and Economics UNIVERSITY OF NEW HAMPSHIRE, USA ABSTRACT: Departing from the explanatory and descriptive approaches common in many of the academic studies of international expansion, this paper uses a managerial approach to develop and illustrate a process that can assist managers in the formulation of their international expansion strategies and plans. A comprehensive model of international expansion is outlined and applied to determine the optimal country to be targeted for entry by a US hotel firm and the optimal entry mode to be used. The model consists of three sections. Section One (macro assessment) identifies the major external macroenvironmental variables that determine the risks and opportunities of international expansion: market size, market growth and purchasing power; political, economic, legal and regulatory risks; and cultural and geographic distances. Through macro assessment, countries with the optimal risk/opportunity profiles are identified and ranked. Section Two (micro assessment) is applied to the optimal countries identified in Section One to estimate the potential profitability and financial value created (as...
Words: 6326 - Pages: 26
...Assignment – Macro-Economics | Assignment Cover Sheet Details | Name(s) | Saumil PabariSurbhi SardanaSonali Rawal | Roll No.(s) | GDEC12IBWM062GDEC12IBWM065GDEC12CMM30 | Email Address(s) | saumil.gdec12@spjain.orgsurbhi.gdec12@spjain.org sonali.gdec12@spjain.org | Course | MacroEconomics | Faculty | Prof. Dave Barrows | Assignment | Group Assignment | Due Date | 26 March 2013 | Date Submitted | 26 March 2013 | Submitted by | Surbhi Sardana | | | Executive Summary Brazil is the 5th largest country in the world, with an area of 8.515 km2, and a population of over 200 million. Brazil is a country with large natural resources and a large labor pool. It has managed to exploit these to become South America's leading economic power and regional leader, and one of the first in the area to begin an economic recovery. Highly unequal income distribution and crime remain pressing problems. Over 25% of population is still below the poverty limit. Brazil has its work cut out for itself where it has to be all set to host both the 2014 World Soccer Cup and the 2016 Olympic Games (Focus2move website). We begin this report by providing a summary of the economic activities taking place in Brazil that are likely to affect the future. Then, the report is divided into three parts; the first highlighting the macro-economic factors that will help forecast the future demand for passenger automobiles in the local market, the second highlighting the macro-economic factors that...
Words: 4878 - Pages: 20
...Wal-Mart and the U.S. Economy Dr. Robert Jantzen Professor of Economics Iona College Dr. Donn Pescatrice Professor of Economics Iona College Dr. Andrew Braunstein Professor of Business Economics Hagan School of Business Iona College Corresponding Author: Dr. Donn Pescatrice Iona College Department of Economics 715 North Avenue New Rochelle, NY 10801 (914)-637-2729 (dpescatrice@iona.edu) March, 2008 Wal-Mart and the U.S. Economy ABSTRACT The Wal-Mart company, the world’s largest retailer and second-largest corporation, is a dominant U.S. business. This study investigates whether there are significant long-run relationships between the business of Wal-Mart and the overall U.S. economy as measured by an array of traditional macro-level variables. Cointegration analysis reveals that Wal-Mart sales generally move counter to overall economic conditions, dampened in more prosperous economic periods and buoyed in more sluggish economic environments. Consequently, trends in Wal-Mart sales may serve as a rather non-traditional contrarian economic bellwether. Keywords Wal-Mart . macroeconomy . cointegration . bellwether JEL Classifications E32 . L81 . M21 WAL-MART AND THE U.S. ECONOMY Introduction The Wal-Mart corporation has come under media scrutiny for a myriad of reasons in recent years. It continues to be the focus...
Words: 6331 - Pages: 26
...Capital Consulting Group Macro Environmental Study in China Macro Environmental Study in China 40 Yr-on-yr % Change of GDP Executive Summary The National People's Congress The People's Republic of China The Chairman The Central People’s Government The Central Military Commission The Supreme People's Court The people's procuratorates 30 20 10 0 1990 1992 1994 1996 1998 2000 2002 2004 2004 507 2265 32132 1500 Categories Low-income country $ Medium-income country $ High-income country $ China $ 1990 356 1170 19617 320 2000 383 1723 26528 930 2002 394 1770 26130 1100 2003 439 1938 28195 1270 GDP in Expenditure 10000 8000 6000 4000 billion RMB Private Consumption Government Expenditure Gross Dom. Fixed Capt. Local Congresses and Governments Autonomous Regions Economic Scenario Gross Domestic Production 2000 0 1991 1993 1995 1997 1999 2001 2003 -2000 Pillar Industries GDP 25000 20000 15000 10000 Billion RMB 12000 10000 8000 6000 4000 Billion RMB Types of Industries 2005 Net Im & Export 1st Ind. 2nd Ind. 3rd Ind. 5000 0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2000 0 1990 1992 1994 1996 1998 2000 2002 2004 % Share In Different Areas Southwest 9% CentralSouth 16% Northwest 11% North China 22% Northeast 18% East China 24% 2006 2006 2005 580 2640 35131 1740 -1- Levin Human Capital Consulting Group Macro Environmental Study in China Money supply Types...
Words: 5805 - Pages: 24
... 2. Analyze IBM strategies, to remix their businesses in order to move to the emerging higher-value spaces, in Macro and Micro environment level 3. IBM strategy PESTEL analysis in Macro level Five forces analysis in Micro level Recommendation Conclusion SOWT analysis Complexity analysis 4. o IBM understood Value was shifting in the IT industry, driven by the rising tide of global integration, a new computing paradigm and new client needs. o Economies of developing nations were growing rapidly, driven by historic investments in fundamental business infrastructure. Enterprises were looking to tap skills and expertise available all over the world and to integrate their operations globally. o Change in computing architecture was rippling across the data center and the network, along with a proliferation of technology infused into all aspects of work and life. Companies were seeking to integrate advanced technology with their business processes and operations, not only to reduce costs, but to enable innovation and growth. o IBM remixed their businesses in order to move to the emerging higher- value spaces by focusing on software and IT industry. IBM Strategies 5. IBM Strategies Hardware And Services Software IBM sold the personal computing department To Lenovo 6. PESTEL Analysis for Macro environment factors Social Political Technological Environmental Economic Legislative 7. Iraq War in 2003, affected world economy, and IBM stock fell down. Technology affects directly to...
Words: 1417 - Pages: 6
...develop learners’ ability to evaluate the elements of the macro environment and its relation to an organisation. Select an organisation which you are familiar with. Explain the elements of its macro environment and discuss how these element(s) affect your selected organisation. Recommend improvements that can be made by the organisation in managing the macro environment effectively. Criteria Description on the selected organisation Description on the general macro environment elements Identification and discussion on element(s) of macro environment that affects the selected organisation Recommendations to improve management of the macro environment in the selected organization 1.0 Introduction A macro environment comprises the external factors that can significantly impact its performance and ability to compete in its marketplace. These factors are often out of the control or management ability of a company. Factors typically include economic, demographic, political, and technological forces in business. Business owners and managers often spend copious amount of time and effort to assess the overall economic environment in order to determine the number and strength of each factor. Strategies and performance reviews can help owners and managers use the macro environment factors to create a competitive advantage for their respective companies. For companies with a global foot-print, their exposure to macro environment elements is magnified. The Coca-Cola...
Words: 3564 - Pages: 15
...to Lahore School of Economics By Name: M. Daniyal Kamran Section B 07u0391 For Award of Degree of Bachelors of Business Administration(Honors) in (Majors) Finance (Minors) in Maths, Stats and Social Sciences Session: 2007 to 2011 Declaration This thesis contains no material, which has been accepted for the reward to the candidate of any other degree or diploma, in any university or other institution. To the best of my knowledge the thesis contains no material previously published or written by another person, except where due reference is made in the text of the thesis. ___M. Daniyal Kamran____ Name RESEARCH COMPLETION CERTIFICATE Certified that M. Daniyal Kamran, id No. 07u0391 Session 2007 to 2011 has carried out and completed the research project entitled “ Thesis title” under my supervision for requirement for the award of Degree of Bachelor of business Administration Honors (Majors) by Lahore School of Economics. Research supervisor (Zehra Raza) Lahore School of Economics TABLE OF CONTENT ...
Words: 5638 - Pages: 23
