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Article

Rule by Law, Law-Based Governance, and Housing Prices: The Case of China

by 1,2, 1,3,* and 4
1
School of International and Public Affairs, Shanghai Jiao Tong University, Shanghai 200030, China
2
China Institute for Urban Governance, Shanghai Jiao Tong University, Shanghai 200030, China
3
School of Mathematics and Finance, Chuzhou University, Chuzhou 239000, China
4
Economics School, Zhongnan University of Economics and Law, Wuhan 430073, China
*
Author to whom correspondence should be addressed.
Academic Editors: Maciej J. Nowak, Giancarlo Cotella and Przemysław Śleszyński
Land 2021, 10(6), 616; https://doi.org/10.3390/land10060616
Received: 26 April 2021 / Revised: 6 June 2021 / Accepted: 7 June 2021 / Published: 9 June 2021
Although some attempts have been made to elucidate the relationship between law-based governance and housing prices, the existing literature still provides limited knowledge about the mediating mechanisms through which law-based governance correlates with housing prices. This study specifically investigates how the association between the rule of law and housing prices is sensitive to public satisfaction, and how the connection is heterogeneous across geographic and socioeconomic groups. Using panel data of Chinese cities over the period 2014–2017, our econometric estimation results indicate that law-based governance may enlarge financial loans and foreign investment and then raise housing prices, which is robust to different specifications. Moreover, the relationship is heterogeneous across city groups and sensitive to the degree of satisfaction with the rule of law quality. Additionally, we demonstrate that the mediating role of financial loans is larger than that of foreign investment. In the stage of emerging economies’ pursuit of the rule of law, our findings have useful implications for local governments to control rapidly rising housing prices by reducing loans and foreign investment. View Full-Text
Keywords: rule by law; law-based governance; housing price; sensitivity; heterogeneity; mediating mechanism rule by law; law-based governance; housing price; sensitivity; heterogeneity; mediating mechanism
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MDPI and ACS Style

Chen, J.; Zhang, H.; Zhou, Q. Rule by Law, Law-Based Governance, and Housing Prices: The Case of China. Land 2021, 10, 616. https://doi.org/10.3390/land10060616

AMA Style

Chen J, Zhang H, Zhou Q. Rule by Law, Law-Based Governance, and Housing Prices: The Case of China. Land. 2021; 10(6):616. https://doi.org/10.3390/land10060616

Chicago/Turabian Style

Chen, Jie, Haiyong Zhang, and Qian Zhou. 2021. "Rule by Law, Law-Based Governance, and Housing Prices: The Case of China" Land 10, no. 6: 616. https://doi.org/10.3390/land10060616

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