Local Government Debt Constraint And Productivity Growth In China

System of tax distribution in 1994 increased local province expenditure,and local government's debt has a profound and lasting influence on local economy.At this stage,foreign scholars have obtained a number of research achievements about the impact of government debt on economic growth.However,there are differences in political system,economic system and financial market degree of development.Therefore,foreign studies may not reflect the situation of our country.So study of the relationship between government debt and economy in the Chinese context is necessary.This paper use SBM(slack-based measure)and GML index(global-Malmquist-Luenberger)to analyze total factor efficiency(TFE)and total factor productivity(TFP)accounting for local government debt,and estimated China's provincial TFE and TFP accounting for local government debt for the period 2000-2014.Meanwhile,the province is divided into three regions,and analyze the efficiency of each input factor.In addition,the paper also makes an empirical analysis on the factors affecting efficiency and productivity.The results show: first,local government debt has significant impact on both TFE and TFP.Neglecting local government debt may overestimate economic performance in most provinces.Second,Chines provinces differ greatly in factor efficiency.In recent years,labor goes eastward,while capital and land supply biases westward.This has deteriorated the regional resource misallocation.Finally,land utilizing efficiency and trade openness are positively associated with TFE and TFP,and R&D investment and industrial structure upgrading are positively associated with TFE,while government size and ratio of state owned enterprises are negatively associated with TFE and TFP.