Sivaguru Ganesan

Causal relationship between construction flows and GDP: evidence from Hong Kong

Granger causality methodology is used to investigate lead-lag relationships between construction activity and aggregate economy. Using data from Hong Kong, the results of this paper suggest strongly that the GDP tends to lead the construction flow not vice versa. Our finding is contrary to the view that construction is more volatile than the GDP. However, our results show that the construction volatility after 1990 is smaller than that in the period 1983-1989, a result that is particularly important for policymakers in that it is the macroeconomic policy of government that affects output, and influences the construction activity, and not vice versa.

Matching housing supply and demand: an empirical study of Hong Kong's market

This paper has the objective of improving on the issue of forecasting new housing construction, and highlights differences between space demand and investment demand in housing markets. Further, it indicates how these differences will affect construction decisions. The first step is to identify the factors associated with estimating residential property prices in Hong Kong, based on a demand-supply adjustment process. Specifically, this study examines the role of population growth, transaction volume, inflation and interest rate in determining house prices. Second, based on these estimations, a methodology is developed to estimate the investment demand schedule and new construction of residential property.

Technology transfer: international collaboration in Sri Lanka

The real tests for technology transfer are whether such transfers have contributed significantly to the vibrant development of the recipient industry. Technology transfer (TT) process that is knowledge driven demands a recipient industry with adequate capacity for absorbing new knowledge. International joint ventures and subcontracts employed in building material and construction can be serious vehicles of TT provided they contribute to providing higher quality inputs into the wider industry. These issues are examined through a survey of construction subcontracts during the period 1985–2002. The respondents indicated that moderately favourable conditions for TT existed in the completed projects. Nonetheless, the paper argues that negligible real productivity changes in construction in Sri Lanka in the recent decade point to stagnation in growth in local absorptive capacity. China in contrast has placed a balanced emphasis on upgrading building materials and equipment, design and construction, and built up an impressive absorptive capacity, with modernisation of the entire industry in prospect. The paper suggests advance planning for TT in foreign funded projects to ensure greater participation of local firms, together with a balanced focus on efficient and timely execution of projects, the profitability of participants, and realisation of TT goals.

On land supply and the price of residential housing

This paper develops an econometric model to examine the impact of land supply on residential housing prices. Specifically, this study examines the role of population, permanent income, real mortgage interest rates, construction cost, speculative demand, land supply and government land policy in the determination of private housing prices in Hong Kong. Empirical results provide strong evidence that an increase in land supply will bring forth a decrease in housing prices. The results also reveal that housing prices are dominated by the fundamental demographic and economic factors. The relatively small response coefficients suggest that speculative demand and land supply have a significant but modest impact on housing prices.

URBAN RENEWAL AND DISPLACEMENT IN HONG KONG

This paper argues that, in Hong Kong, urban renewal partially mitigates negative residential displacement outcomes. Theoretical underpinnings, rationale, and research methodology used to study the cause and effect of urban redevelopment are presented. Baseline information on the scope and nature of redevelopment in Hong Kong reveals that approximately 1.5 buildings a day have been demolished over the last 10 years. Evidence from empirical characterization and correlation analysis by district supports production and class variables as determinants of redevelopment. Projections based on building-demolition data, combined with older housing estate populations, suggest that the rate of redevelopment-led displacement is 14,000 urban dwellers annually. Outlined are renewal policies aimed at social equity in redevelopment, better zoning, and public-private development agency cooperation. Case studies of households experiencing urban renewal show that, in spatial, economic, and social terms, the outcome appears t...

Policies for implementing multiple intensive land use in Hong Kong

The entire Hong Kong SAR acts as a network ofprimary, secondary and tertiary MultipleIntensive Land Use (MILU) zones linked byrelatively cheap and speedy public transport.The MILU forms of Hong Kong have been developedas an efficient design response within a smallcity-state to population growth and shortages of buildable land. However, planning guidelines and development control instruments and policies have promoted public and private sectorcooperation and achieved a high degree ofintegration of residential, commercial and other uses. This paper discusses the design approaches in Hong Kong and examines the basic characteristics of the Hong Kong model of mixed-use development, planning mechanism and relevant policies.

The Impact of a Rapidly Expanding Service Sector on Private Office Property: The Case of Hong Kong

Hong Kong’s economy has undergone a remarkable transformation over the past two decades. The rapid expansion of the service sector is a major outcome. Within the services sector, the finance, insurance, real estate (FIRE) and business services sub†sector is the most influential and also the major source of generating demand for office space in the economy. This paper examines how the rapid expansion of the FIRE and business service sub†sector influences new office construction. Using the Engle†Granger (1987) methodology for cointegration and error correction mechanism (ECM), the causal relationships between growth of sub†sectors of the services sector and the new office space construction were explored. The FIRE and business services sub†sector growth is shown to be cointegrated with new office space construction. The paper reports empirical findings based on a sample survey on location and quality of space. The study reveals that the growth of the FIRE and business service sector has influenced office space development in terms of location of space, per capita space and the type and quality space during 1981†2000.

Employment maximization in construction in developing countries

This paper presents strategies to maximize construction sector employment in labour-surplus economies. These emerge as an integral part of any technology that seeks to maximize contruction output at the same time. This technology is determined in a dynamic framework by the resources available, however, without ignoring the relevant political, social and economic circumstances and related constraints. It is found to be unique for a given situation. The case study of Sri Lanka, recognizing the above principles, establishes concrete policies necessary to eliminate supply and demand side constraints and for steady growth of construction output and employment, within the bounds of this appropriate technology.

Growth of Advanced Service Firms And Usage of Quality Office Space: The Case of Hong Kong

This paper examines the impact of the expanding service sector in Hong Kong upon the increasing quality of office space demanded. Two measures are used to represent quality: increased usage of IT facilities in offices; and increased space per employee. The main result is that there is a significant correlation between growth of the service sector, as represented by the FIRB sector, and demand for better quality space. However, not all of the firms in the FIRB sector use/demand high quality space. The finance, business services and technology firms in Hong Kong have invested relatively heavily in IT facilities, and have also gained a higher growth relative to those with less investment in IT. Insurance and real estate firms use relatively less IT facilities. Growth of the service sector has also influenced the space usage pattern in Hong Kong. The causality analysis shows that provision of higher quality office space attracts new users.

Influence of Firm Size, Age and Usage of IT on the Growth of Firms: Some Evidence from Hong Kong' s Service Sector

The study uses a sample of FIRB sector firms in Hong Kong to examine some aspects of firm dynamics and characteristics. The most important finding from the model is that usage of information technology (IT) is one of the key factors that explain the variation of growth of modern firms. It also finds that firm size is an important determinant of firm growth: the smaller the firm size, the greater the firm growth. Gilbrats Law therefore fails, and this finding is consistent with pioneering works of Evans (1987) and Hall (1987). Indicating a close relationship between the usage of IT and the increasing trend of knowledge-based employees in firms, it is also found that skilled employees exert a relatively positive influence on the growth of firm. This finding may be indicative of the situation where new working practices such as team working is practiced, where group space is important rather than permanent territorial offices, where groups of skilled professionals can work together with relatively efficient space usage. Results, however, confirm that location of the firm does not play an important role for the growth.