Research On The Influence Of Local Government Debt On Economic Growth In China

With the development of the socialist market economy and the deepening of the financial reform,China's local government debt has played an increasingly important role in promoting local economic growth.However,with its increasing scale,inefficient use of funds and violation of guarantees are frequent problems.If we cannot effectively solve the problem of local government debt,it will accumulate debt risk.It will not only disrupt the normal operation of local governments and the supply of public goods,but also affect China's financial safety and economic growth.Therefore,in order to regulate the behavior of local government debt and avoid financial and debt risks,we must research on the theory of local government debt.We should explore effective local government debt management system,risk prevention system and accountability system to prevent local government debt risks.This is of great significance for creating a good environment for economic growth and sustainable development.Based on the existing domestic and foreign related research achievements on the impact of government debt on economic growth and theoretical analysis,this paper makes an empirical analysis of the panel data model from 2003 to 2015 in 30 provinces and municipalities in China.The results show that the local government debt in the country and the eastern and central regions has a significant non-linear effect on economic growth,which shows an inverted "U" relationship.The debt ratio threshold in the country is 36.1%,and the debt ratio threshold in the eastern region is 22.9%,and the debt ratio threshold in the central region is 24.2%.As far as the west is concerned,the local government debt has a significant linear impact on economic growth,and the increase of local government debt is conducive to the economic growth in the western region.Finally,based on the empirical results,this paper puts forward the following policy suggestions: to improve and strictly implement the relevant laws and policies and regulations of local government debt,to harden the budget constraints of local government,to improve the scientific debt risk prevention mechanism,to strictly control the scope of government guarantee,and to improve the system of investigating local government debt responsibility;To improve the efficiency of the use of local government debt funds,continue to deepen the reform of the financial system and land system,improve the transparency of local government debt information,allow credit rating agencies to risk assessment of new bonds,and establish a scientific debt decision-making mechanism.