| Title |
Analyzing Fluctuation of Construction Business under the Influence of Macroeconomic Factors |
| Authors |
Kim Sang-Ki ; Lee Sang-Hyo ; Kim Jae-Jun |
| Keywords |
Construction Business ; Macroeconomic Factors ; Vector Error Correction Model |
| Abstract |
The recent change of trend in construction industry, following the financial crisis, confirms that macroeconomic trend and construction business is closely related. The changes in macroeconomic situation exert great influence on construction market system as an external impact. Thus, it is necessary to analyze the path and extent of impact that macroeconomic changes incur on construction business. In this research, VECM (Vector Error Correction Model) is used to analyze correlation between macroeconomic change and construction market, in order to examine dynamic relationships between the two factors that interact through intricate, multiple channels. The analysis result demonstrates that investment in construction business heavily depends on GDP, currency exchange rate and KOSPI (Korea Composite Stock Price Index). In comparison, interest rate shock, which is usually a main factor in deciding amount of financial investment, turned out to have less effect on construction business. Fluctuation in investment amount for construction business depended upon corporate bond rate shock. However, the extent was less than KOSPI. In terms of consumer price index and household expenditure, the fluctuation in investment for construction business was positive and negative respectively, but the amount was insignificant. |