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Research Monograph The Economic Implication of Land Purchase: A Study on the Net Purchase of Land by Corporate Sector Over the Long Term December 31, 2019

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Series No. 2019-11

Research Monograph KOR The Economic Implication of Land Purchase: A Study on the Net Purchase of Land by Corporate Sector Over the Long Term #General(Other) #Real Estate #General(Other)
DOIhttps://doi.org/10.22740/kdi.rm.2019.11 P-ISBN979-11-5932-624-0 E-ISBN979-11-5932-631-8

December 31, 2019

  • KDI
    OH,Jiyoon
  • 프로필
    Cho, Duksang
Summary
This study uncovers the fact that Korean companies have been purchasing a large amount of land from households for about 40 years using various statistics such as national accounts and corporate financial data and examines empirically the incentives of corporations to purchase land.

We argue that the accumulation of land assets over a long period of time by Korean corporations is an unusual phenomenon. From 1975 to 2018 in which South Korea's sectoral national accounts statistics exist, the large net purchases of land by Korea's non-financial corporations from the household sector have been observed every year except before and after the foreign exchange crisis in 1998 and the global financial crisis in 2008. We find that among OECD countries Japan in the 1960s to early 1990s is the only case where the non- financial corporations had purchased a large amount of land from the household sector every year such as South Korea.

Firms can purchase land for either productive or speculative activities. In the case of productive activities, we investigate a hypothesis that companies' demand for land could have increased significantly, especially since the 2000s, due to the changes in the industrial structure of South Korea. We use the Economic Census by Statistics Korea (2010, 2015) to show that firms in the place where service industries are more agglomerated are likely to purchase more land than those resided in less service-intensive areas. By using a firm- level micro dataset, KIS-DATA, to estimate the elasticity of land as a firm's production input, we also show that the contribution of land to production has increased significantly after the 2000s.

Unlike capital goods such as equipment and buildings, the land does not suffer from depreciation and its supply is inelastic, so the land is an investment good that can benefit from rising prices as the economy develops. Companies, thus, could have speculative incentives to invest part of their operating profits on land. We use the Economic Census by Statistics Korea (2010, 2015) to show that some firms experiencing positive operating profits and decreased production facilities are likely to purchase land. This suggests that the net purchases of land by corporations could occur in part due to their speculative motive.
Contents
발간사
요 약

제1장 서 론

제2장 기업 토지 구매 현상에 대한 통계적 이해
 제1절 국민계정에 나타난 기업의 토지 구매 현황
 제2절 주요국 기업의 토지 구매
 제3절 재무자료에 나타난 기업의 토지 구매
 제4절 토지 관련 세금에 나타난 기업의 토지자산
 제5절 소 결

제3장 기업의 토지 구매요인 분석
 제1절 경제구조 변화와 집적화(agglomeration) 현상
 제2절 기업의 토지 구매요인에 대한 검토
 제3절 가계의 토지 판매요인에 대한 검토
 제4절 소 결

제4장 결 론

참고문헌
부 록
ABSTRACT
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