Spatial effects of the property sector investment on Greek economic growth.

Purpose - The aim of this paper is to identify the importance of property sector investment in regional economic growth in Greece. Design/methodology/approach - The paper uses regional accounts data, including investment and employment for all Greek industries. The standard Cobb-Douglas specification is used. The authors apply random effects and GMM estimators for dynamic panel data and employ two model specifications (aggregate and disaggregate). Findings - The results indicate a positive relationship between investment in real estate services and hotels and restaurants and regional growth. Also, investment in the energy sector, which is closely linked to construction and consequently to housing activity, appears to have a positive and significant growth effect. Practical implications - The authors believe that these results are useful, make a contribution to the existing knowledge, and provide firm justification that the property sector has a considerable effect on regional economic growth in Greece. Originality/value - One of the distinctive features of the paper is that it discusses critically the extent to which the Greek property sector, as part of a broader nexus of domestic and global dynamics, affects regional economic growth - either directly or indirectly. To the best of the authors' knowledge, none of the existing studies in this area provides a systematic treatment of the property sector as a contributory factor in explaining the growth performance of Greek regions. The authors believe that this is an important empirical issue, especially given the spatial disparities that characterise Greek economic growth. [ABSTRACT FROM AUTHOR]