Abstract
By constructing a “financial accelerator” model that combines real estate assets and heterogenous enterprises, we use China’s housing price data to explore the effect of real estate assets on corporate debt and macroeconomic stability in the context of the Chinese economy. Based on the dynamic economic characteristics of the model, we find that the financial accelerator mechanism of housing prices further amplifies the various effects of housing price fluctuations when transmitted to the macroeconomic system, resulting in the size of corporate debt closely related to the economic boom–bust cycles. However, owing to the institutional factors, heterogenous firms have some differences in debt stability under the influence of asset price fluctuations. There is an obvious crowding-out effect of state-owned enterprise (SOE) credit on private-owned enterprise (POE) credit, and the existence of the implicit guarantee ratio of SOE credit will weaken the external financing constraints on the SOE and promote the expansion of SOE credit. Finally, the effect of fiscal and monetary policies on corporate debt stability is somewhat divergent, institutional factors can similarly weaken policy effects.
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