Abstract
This paper is the first empirical evidence for the impact of financial development on the real estate market (REM) in Vietnam. The researchers utilize time series data in Vietnam in the period from 2004:Q3 to 2018:Q4. By using the autoregressive distributed lag (ARDL) model, the paper analyzes the impact of financial development through the banking system development and the stock market development on the REM in the short and long term. The research results are consistent with some previous studies as the impact of financial development on REM is found in the short and long term, and the impact is mainly positive. In particular, the impact of the banking system development on the REM is stronger than the impact of the stock market development on the REM. In addition, the paper also achieves great success in discovering the negative impact of the global financial crisis on the In particular, the impact of the banking system development on the REM is stronger than the impact of the stock market development on the REM in the short and long term, which is a new discovery compared to the previous studies. These findings are significant for the In particular, the impact of the banking system development on the REM is stronger than the impact of the stock market development on the REM in the economies all over the world, especially for a developing country like Vietnam.
Highlights
The income variance around the world can be explained through the differences in the financial development across countries (Buera, Kaboski, & Shin, 2011; Buera & Shin, 2013)
The analysis results regarding the impact of financial development on the real estate market (REM) according to the autoregressive distributed lag (ARDL) model are below: Table 5
The paper shows the impact of financial development on the REM in both the short and long term, and the impact is mainly positive
Summary
The income variance around the world can be explained through the differences in the financial development across countries (Buera, Kaboski, & Shin, 2011; Buera & Shin, 2013). In the countries with efficient financial development, capital can be accessed from the stock market or the banking system (including mortgage of real estate for loans) (Nguyen, Xuan, & Bui, 2020). In the countries with poor financial development, the access to capital is mainly through real estate mortgages, which contributes to the decrease in financial market imperfections (Lim, 2018; Bui, 2019). The global financial crisis can increase the risk in the capital market, causing negative impacts on the REM (Golob, Bastic, & Psunder, 2012). The research data were collected in Vietnam, a developing country with the primary access to capital from real estate mortgages; the impact of financial development on the REM may have its own characteristics, different from the research results in developed countries
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