| On April 2 2018,the Ministry of Finance issued the Notification on Regulating the Investment and Financing Behavior of Financial Enterprises to Local Governments and State-owned Enterprises(Finance Document No.23[2018],hereinafter referred to as Document No.23),which further upgraded the supervision to the investment and financing behavior of local governments and state-owned enterprises.The notification clearly indicates that:apart from purchasing local government bonds,state-owned financial enterprises must not provide any form of financing directly or indirectly to local state-owned enterprises and institutions;they must not illegally add any new loans through local government financing platform;they must not require local government to provide guarantees or undertake joint liabilities for their loans;they must not provide debt capital for local construction projects,government investment funds and Public-Private Partnership(PPP)projects.According to Finance Document No.23,financial institutions and local governments are two of the most important fund suppliers of PPP.Therefore,PPP have to face two important fund constraints which are financial supply structure and fiscal constraints.This paper analyzes theoretically and empirically the impacts of the two kinds of fund constraints on development of PPP.In addition to the introduction,conclusions and policy recommendations,this paper is divided into four chapters:Chapter 2 gives the theoretical basis of financial supply structure,fiscal constraints and PPP.It analyses theoretically the impacts of financial supply structure and fiscal constraints on development of PPP.Financial supply structure contains financial correlation ratio,financial deepening ratio,ratio of direct financing to indirect financing.And fiscal constraints contain fiscal revenue constraint,fiscal deficit constraint and local government debt constraint.Chapter 3 analyses specifically the indicators and characteristics of financial supply structure,fiscal constraints and PPP heterogeneity.It analyses the characteristics of China's financial supply structure,fiscal revenue,fiscal deficit and local government debt from the national level,regional level and provincial level.At the same time,it also analyses the region heterogeneity,industry heterogeneity and return mechanism heterogeneity of PPP.Chapter 4 empirically analyses the impacts of financial supply structure and fiscal constraints on PPP development based on region heterogeneity of PPP.The empirical results show that:(1)The impacts(or correlation coefficients)of financial supply structure and fiscal constraints on PPP development are heterogeneous;(2)The transformation of financial supply structure to PPP investment is inefficient or even "invalidation";Fiscal fund has "crowding-out effect" on financial capital;Fiscal revenue constraint has "hedging effect",which affects the fiscal fund support to PPP;PPP investment depends excessively on fiscal deficit and local government debt,which is disadvantageous to the healthy and sustainable development of PPP.Chapter 5 empirically analyses the impacts of financial supply structure and fiscal constraints on PPP development based on industry heterogeneity and return mechanism heterogeneity of PPP.The empirical results show that there is not consensus trend in the correlation coefficients among financial supply structure,fiscal constraints and industry and return mechanism of PPP,and the correlation coefficients are heterogeneous.From the perspectives of PPP industry landing rate and the return mechanism landing rate,the transformation of financial supply structure to PPP investment is inefficient or even"invalidation";the landing rate of PPP can not be improved by increasing fiscal revenue;and the development of PPP still excessively relies on fiscal deficit and local government debt.In this paper,the main contributions are two aspects.First,in this paper,financial supply structure is divided into financial aggregate supply structure and the financing supply structure,and financial aggregate supply structure is divided into financial correlation ratio and financial deepening ratio.Fiscal constraints are divided into fiscal revenue constraint,fiscal deficit constraint and local government debt constrains.This Paper analyses theoretically the different impacts of financial supply structure and fiscal constraints on development of PPP.Second,on the basis of theoretical analysis and characteristic analysis of China's financial supply structure,fiscal constraints and PPP heterogeneity,this paper empirically analyses the financial supply structure,fiscal constraints and PPP region heterogeneity by using provincial panel model,and empirically analyses the financial supply structure,fiscal constraints and PPP industry heterogeneity and return mechanism heterogeneity by using correlation coefficient matrix.This paper also carres out the robustness analysis and heterogeneity analysis respectively based on PPP landing rate.The empirical results show that the impacts(or correlation coefficients)of financial supply structure and fiscal constraints on PPP investment rate and landing rate are heterogeneous.Such heterogeneity determines that the normative development of PPP cannot adopt an "one-size-fill-all" approach.Instead,differentiated PPP normative policies should be carried out according to local conditions and PPP heterogeneity. |
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