Collective Leadership, Career Concern, and the Housing Market in China: The Role of Standing Committees

40 Pages Posted: 6 Jan 2015

See all articles by Nan Gao

Nan Gao

Southwestern University of Finance and Economics (SWUFE)

Cheryl Xiaoning Long

Xiamen University

Lixin Colin Xu

Cheung Kong Graduate School of Business

Date Written: January 4, 2015

Abstract

Despite an emerging literature on political determinants of economic performance in China, little is known about whether standing committees of the Communist Party, an institution of collective leadership, matters for economic development. Using Chinese provincial level data for 1997-2011, we find that a higher ratio of new members in the standing committee of the local Communist Party is correlated with a higher housing sales/GDP ratio. In addition, more new members in the standing committee are also associated with a lower level of GDP per capita and a lower manufacturing output growth rate. The results on the size of the real estate sector are robust to a series of alternative specifications, including controlling for potential omitted variables, as well as instrumenting the ratio of new standing committee members this year with the proportion of the provincial standing committee members over the age of 59 in the previous year. Our findings suggest that career incentives of party leadership affected real estate development at the expense of manufacturing growth in the locality, and that the structure of collective leadership does have important economic consequences.

Keywords: collective leadership, non-democratic country, housing, party, career concern

JEL Classification: D72, N60, H10, O10, H70, O50, P20, P00

Suggested Citation

Gao, Nan and Long, Cheryl Xiaoning and Xu, Lixin Colin, Collective Leadership, Career Concern, and the Housing Market in China: The Role of Standing Committees (January 4, 2015). Available at SSRN: https://ssrn.com/abstract=2545161 or http://dx.doi.org/10.2139/ssrn.2545161

Nan Gao

Southwestern University of Finance and Economics (SWUFE) ( email )

55 Guanghuacun St,
Chengdu, Sichuan 610074
China

Cheryl Xiaoning Long

Xiamen University ( email )

Xiamen, Fujian 361005
China

Lixin Colin Xu (Contact Author)

Cheung Kong Graduate School of Business ( email )

1017, Oriental Plaza 1
No.1 Dong Chang'an Street
Beijing
China

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