Contact Us

For Marketing, Sales and Subscriptions Inquiries
2637 E Atlantic Blvd #43110
Pompano Beach, FL 33062

Conference List

The Economics and Finance Letters

February 2016, Volume 3, 2, pp 13-20

The Lead-Lag Relationships between Construction Investment and GDP: Granger Causality Tests and Impulse Responses Using Japanese Data

Kazutaka Kurasawa

Kazutaka Kurasawa 1

  1. Associate Professor, Faculty of Management Information, Yamanashi Gakuin University, Kofu, Yamanashi, Japan 1

on Google Scholar
on PubMed

Pages: 13-20

DOI: 10.18488/journal.29/2016.3.2/

Share :


This paper analyzes the lead-lag relationships between construction investment and GDP at business-cycle frequency by the tests of Granger causality and the impulse responses in the framework of the vector autoregression, using the annual Japanese data. The analysis find that private construction investment tends to lead GDP, not vice versa, in the Granger sense and is of value in predicting the course of GDP one year ahead. Government construction investment, on the other hand, tends to lag GDP.

Contribution/ Originality
This study is one of very few studies which have investigated empirically whether construction investment preceded the economic growth in business-cycle frequency within the methodological framework of Granger causality.


Construction investment, GDP, Vector autoregression, Granger causality, Impulse responses, Business cycle.



  1. Akaike, H., 1973. Maximum likelihood identification of Gaussian autoregressive moving average models. Biometrika, 60(2): 255-265.
  2. Akintoye, A. and M. Skitmore, 1994. Models of UK private sector quarterly construction demand. Construction Management and Economics, 12(1): 3-13.
  3. Anaman, K.A. and A.C. Osei, 2007. Analysis of the causality links between the growth of the construction industry and the growth of the macro-economy in Ghana. Construction Management and Economics, 25(9): 951-961.
  4. Bon, R., 1991. What do we mean by building technology? Habitat International, 15(1): 3-26.
  5. Bon, R., 1992. The future of international construction: Secular patterns of growth and decline. Habitat International, 16(3): 119-128.
  6. Bon, R. and R. Pietroforte, 1993. New construction versus maintenance and repair construction technology in the US since world war II. Construction Management and Economics, 11(2): 151-162.
  7. De Long, J.B. and L.H. Summers, 1993. How strongly do developing economies benefit from equipment investment? Journal of Monetary Economics, 32(3): 395-415.
  8. Dickey, D.A. and W.A. Fuller, 1979. Distribution of the estimators for autoregressive time series with a unit root. Journal of the American Statistical Association, 74(366a): 427-431.
  9. Engle, R.F. and C.W. Granger, 1987;1991. Co-integration and error correction: Representation, estimation, and testing. Econometrica: Journal of the Econometric Society, 55(2): 251-276.
  10. Granger, C.W., 1969. Investigating causal relations by econometric models and cross-spectral methods. Econometrica: Journal of the Econometric Society, 37(3): 424-438.
  11. Granger, C.W. and P. Newbold, 1974. Spurious regressions in econometrics. Journal of Econometrics, 2(2): 111-120.
  12. Han, S.S. and G. Ofori, 2001. Construction industry in China's regional economy, 1990–1998. Construction Management & Economics, 19(2): 189-205.
  13. Lopes, J., 1998. The construction industry and macroeconomy in Sub-Saharan Africa post 1970. Construction Management & Economics, 16(6): 637-649.
  14. Ong, E.O., 1994. Structural and vector autoregressive approaches to modelling real estate and property stock prices in Singapore. Journal of Property Finance, 5(4): 4-18.
  15. Pheng, L.S., 1994. Balancing construction and marketing in world economic development: The four global scenarios. Construction Management and Economics, 12(2): 171-182.
  16. Schwarz, G., 1978. Estimating the dimension of a model. Annals of Statistics, 6(2): 461-464.
  17. Tse, R.Y. and I.S. Ganesan, 1997. Causal relationship between construction flows and GDP: Evidence from Hong Kong. Construction Management & Economics, 15(4): 371-376.
  18. Wong, J.M., Y.H. Chiang and T.S. Ng, 2008. Construction and economic development: The case of Hong Kong. Construction Management and Economics, 26(8): 815-826.
  19. Yiu, C.Y., X.H. Lu, M.Y. Leung and W.X. Jin, 2004. A longitudinal analysis on the relationship between construction output and GDP in Hong Kong. Construction Management and Economics, 22(4): 339-345.


Google Scholor ideas Microsoft Academic Search bing Google Scholor


This study received no specific financial support.

Competing Interests:

The author declare that there are no conflict of interests regarding the publication of this paper.


Related Article

( 1 ) The Lead-Lag Relationships between Construction Investment and GDP: Granger Causality Tests and Impulse Responses Using Japanese Data
( 2 ) Relationships Between Leadership Roles and Project Team Effectiveness as Perceived by Project Managers in Malaysia
( 3 ) Relationships among Team Trust, Team Cohesion, Team Satisfaction and Project Team Effectiveness as Perceived by Project Managers in Malaysia
( 4 ) Long-Run Relationships and Causality Tests Between Military Expenditure and Economic Growth in India
( 5 ) Relationships between Financial Development and Economic Growth: A New Approach by Inputs
( 7 ) Consideration the Relationship Between Information Communications Technology and Economic Growth in Top 10 Economic
( 8 ) New Evidence on the Link Between Income Inequality and Misery Index: A Nonlinear Time Series Analysis
( 11 ) The Nexus between Financial Crisis and Household Consumption: Evidence from Emerging Countries
( 12 ) Study of the Relationship between Economic Growth and Inflation: Application to the Countries of the South Side of the Mediterranean: A Panel Data Approach
( 14 ) The Interactions between Culture, Global Mindset and Leadership in Global Context
( 15 ) The Association Between Corporate Risk Disclosure and Firm Performance in Emerging Country – The Case of Egypt
( 16 ) Moderating Effects of Project Management Experience, Project Team Size, Project Duration and Project Value Size on the Relationship between Project Manager’s Leadership Roles and Project Team Effectiveness in Malaysia
( 17 ) Republic of Zimbabwe National Water Policy: A Desk Review of the Gaps between the Policy and Its Implementation
( 18 ) The Mediating Effect of Market Orientation on the Relationship between Entrepreneurial Orientation Dimensions and Organizational Performance: A Study on Banks in Libya
( 19 ) An Assessment of the Relationship between Budget Deficit Syndrome and Consumer Welfare in Nigeria (1985 – 2014)
( 20 ) The Correlation Between the Palestinian Civil Society Institutions and the Universities (Status: The Palestine Technical University Kadourie with Tulkarm Institutions)
( 21 ) Measuring the Gap Between the Syrian Accounting Qualifications and the International Accounting Education Based on IES 2 and IES 3
( 22 ) Causal Relationship between Imports and Economic Growth in Zimbabwe: An Empirical Analysis 1975 – 2013
( 23 ) Development of the National Economies and the Foreign Trade Relations between Ukraine and Bulgaria (In the Period 2005-2014)
( 25 ) A Theoretical Analysis Upon the Environmental Health and Justice Issue: A Case Study for a Comparison Between G20s Unitary and Federal Members
( 26 ) Examining Long Run Relationship between Household Debt and Household Savings in South Africa – An Error Correction Model and Granger Causality
( 27 ) The Relationship between Currency Conversions and International Business Transactions: Small Businesses and Travelers
( 28 ) Interfaces Between Road Infrastructure and Poverty in Africa: The Case of Malawi, 1994-2013
( 29 ) The Link Between Agricultural Budgetary Allocation and Economic Growth in Nigeria
( 30 ) The Moderating Effect of Governance Mechanisms on the Relationship Between Innovation Strategy and the Performance
( 31 ) An Investigation of the Relationship between Manufacturing Output and Economic Growth : Evidence from Nigerias Data Set
( 32 ) Measuring and Assessing the State of Technological Innovations and the Level of Interaction between Rice Processors and Stakeholders in Rice Processing Industry in Nigeria
( 33 ) The Nexus between Urbanization, Energy Demand and Healthcare in Bangladesh
( 34 ) Correlation between Financial Difficulties and Financing Strategies among Market Stallholders in Batangas City
( 35 ) The Transitional Relationship between Economic Growth and Exchange Rate in Ghana: An Empirical Approach
( 36 ) The Relationship between Financial Development, Economic Growth, and Inflation: Evidence from Southeast Asia
( 37 ) Problems of Bilateral Trade Deficit between Bangladesh and India: A 2SLS Regression Analysis
( 38 ) Exploring the Asymmetric Linkage between Commodity Prices and Fiscal Performance in Nigeria
( 39 ) Nexus between Non-Oil Sectoral Contribution and Economic Growth in Nigeria 1981-2018
( 40 ) Analysis of Causal Nexus between Defense Spending and Economic Growth in Nigeria: A Toda-Yamamoto Approach
( 41 ) The Relationship between Creative Accounting Risks and Auditing Risks from the Perspective of External Auditors in Saudi Arabia
( 51 ) Testing the PPP Using Unit Root Tests with Structural Breaks: Evidence from Politically Unstable Arab Countries
( 53 ) The Effects of Visual Merchandising and Price Sensitivity on Impulse Purchase Behaviour among Young Apparel Shoppers in Bangladesh
( 55 ) An Empirical Investigation of Real Exchange Rate Responses to Foreign Currency Inflows: Revisiting the Dutch Disease Phenomenon in South Asia
( 56 ) Study on Environment and Energy Using Belonging Materials
( 57 ) The Impact of Human Capital on Economic Growth: Evidence from Tunisia Using Star and Stecm Models