Causal relationship between construction activities, employment and GDP: The case of Hong Kong

Yat Hung Chiang, Li Tao, Kwan Wah Wong

Research output: Journal article publicationJournal articleAcademic researchpeer-review

33 Citations (Scopus)


The causal relationship between construction activities and economic development has been extensively studied worldwide. However, the results of these studies are generally inconclusive. Thus, sub-sectors of the construction industry and variances across different periods require further examination. Accordingly, this study aims to fill the knowledge gap. In the case of Hong Kong and with a longer time series, bi-directional causality links between gross domestic product (GDP) and construction activities are found. The correlations of employment with GDP and construction also suggest that employment can be a medium or a mediating or intervening factor of GDP growth. Different causal relationships are observed between the various sub-sectors of the construction industry and GDP in different periods. Bon's inverted U-shaped relationship between the contribution of construction activities to GDP and economic development is supported by our case analysis of Hong Kong. With a long timeframe, our study draws statistically significant conclusions on the contribution of construction activities to the economy. The results of this study may inform the formulation of long-term public policies for sustainable industrial development.
Original languageEnglish
Pages (from-to)1-12
Number of pages12
JournalHabitat International
Publication statusPublished - 1 Apr 2015


  • Construction sectors
  • Economic development
  • Granger causal relationship
  • Hong Kong

ASJC Scopus subject areas

  • Urban Studies

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