Abstract:

Small and micro enterprises are the micro foundation of the market economy, and their enlargement and strengthening are of great significance to China’s economic development and social stability. By matching China’s Micro and Small Enterprises Survey (CMES) data and provincial housing prices data, this paper analyzes the effect of housing prices on the innovation of small and micro enterprises. The empirical results show that housing prices can significantly promote the research and development (R&D) activities of small and micro enterprises. In addition, there is significant heterogeneity in the impact of housing prices on the R&D of small and micro enterprises in terms of enterprise size and the environment in which they are located, gender of the owner and level of education. The mechanism analysis finds that housing prices enhance the innovation willingness and innovation vitality of small and micro enterprises by alleviating their financing constraints and increasing R&D expenditures. Furthermore, housing prices can significantly promote the independent innovation and R&D activities of small and micro enterprises, and there is an inverted U-shaped relationship between housing prices and the innovation of small and micro enterprises. This study provides micro-level empirical evidence of the relationship between housing prices and the innovation of small and micro enterprises, which helps to objectively understand the impact of housing prices on innovation, and provides references to ensure the healthy development of small and micro enterprises.

Key words: housing prices, small and micro enterprises, financing constraints, R&D expenditure, independent innovation