Research On The Impact Of Government Financial Information Disclosure On Local Debt Financing Cost

In order to accelerate regional economic development,local governments borrow debts through various financing methods,which not only leads to the huge scale of local debts,but also makes local governments bear huge financing costs.In 2015,the report of the state council on regulating the management of local government debt pointed out that the average cost of more than 90%of local government debt is around 10%,and local governments need to pay higher interest every year.In the context of slowing fiscal revenue growth and rigid fiscal expenditure,high local debt financing costs are obviously not conducive to the sustainability of local government finance.In order to regulate local governments' borrowing and financing behaviors,China has repeatedly stressed in documents such as opinions on doing a good job in the issuance of local government bonds in 2018 that local governments should establish a market-oriented debt financing mechanism and restrain local governments'behaviors through the market,which cannot be achieved without full and transparent information disclosure.As the financing demanders of the bond market,the quality of government financial information disclosure will affect the investment decisions of stakeholders and thus affect the financing cost of local government bonds.Therefore,this paper believes that it is particularly necessary to analyze the impact of government financial information disclosure on local debt financing costs.This paper first introduces the government financial information disclosure impact on local debt financing costs related theories.Then through the construction of the government financial information disclosure index system to analyze the financial information disclosure status of local governments and combined with the local debt financing costs to analyze the relationship between the two trends.Further,the control of fiscal decentralization,per capita GDP,industrial structure,investment in fixed assets and the macroscopic factors such as social risk-free interest rate fluctuations,with 29 regions(except Tibet and hainan)in 2012-2017,city investment bond interest rates mean and median agent for the dependent variable as the local government debt financing cost,and to the fiscal transparency in China report of fiscal transparency score as an agent of government financial information disclosure key explanatory variables,using panel data regression from the government financial information disclosure on the macro level of local government debt financing costs.The heterogeneous effects of institutional environment and financial imbalance are also investigated.Finally,the robustness test was carried out by adding control variables,key explanatory variables lagging one period and changing the sample time interval.The research conclusions of this paper are as follows:first,good quality of government financial information disclosure provides high reputation for local government financing and reduces the financing cost of local debt.Secondly,the more perfect the institutional environment is,the stronger the reduction effect of government financial information disclosure on local debt financing cost will be.Third,the more imbalanced the finance is,the weaker the reduction effect of government financial information disclosure on the financing cost of local bonds will be.Finally,some Suggestions are given based on the results obtained and the actual situation.