The paper "Real Estate Investment and Financial Efficiency: Regional Variation in Shifting Financial Resources from Real to Fictitious Sector", written by Assistant Professor Yuchao PENG of the School of Finance, Xianjing HUANG, doctoral candidate of Guangxi University and Assistant Professor Ji SHEN of Guanghua School of Management in Peking University, was published as cover article in the 8th issue of "Journal of Financial Research" in 2018.

Abstract: By building an endogenous growth model that includes investment structure and financial development，this paper finds that the increase in the proportion of real estate investment in total fixed asset investment will curb financial efficiency when it is greater than the optimal level. This negative effect is more pronounced when the externality of real estate is weak. Based on the sample of 283 prefecture－level cities over 2003－2013，the empirical results of the fixed effect model，the IV approach and system－GMM support the conclusion of the model. Moreover，the effect of real estate investment on financial efficiency is more pronounced in the western region，the economically underdeveloped areas，and areas with bad real estate sales. Deepening market reform and improving the institutional environment，will help to adjust the investment structure，help to enhance financial efficiency and promote the long － term growth of the real economy.

Keywords: Real Estate Investment，Financial Efficiency，Financial Development，Economic Growth