Research On Debt Efficiency Evaluation Of Local Government Financing Company

The local government financing company is a special product of the financial system and investment and financing system reform in China.It meets or serves the functional needs of the local government and makes up for the lack of financial resources of the local government.Most of the debt funds raised by local government financing companies are invested in urban infrastructure construction,people’s livelihood project construction and other projects with public product characteristics,which play an active role in accelerating the process of urbanization,effectively allocating resources to promote local economic growth,and improving people’s livelihood.However,in recent years,the number of financing platforms shows a trend of rapid growth and then decline,but the scale of debt financing shows a trend of rapid growth,and it has become the main carrier of implicit debt of local governments,and also an important source of risk for China’s economy.Moreover,with the tightening of supervision and policy,the financing companies of local governments are also facing the pressure of resolving the existing debt and transformation and adjustment.In this context,how to evaluate and improve the debt efficiency of local government financing companies has become a major issue related to the vital interests of financing companies,the scientific management and control of local government debt and the healthy development of China’s economy.Based on the dual attributes of "independent legal person" and "government function extension tool" of local government financing company and the use of its debt funds,this paper selects appropriate input and output indicators,and constructs the economic efficiency and social efficiency evaluation index system of local government financing company debt.The VRS model and Malmquist index model of DEA are used to evaluate and analyze the efficiency respectively from the static and dynamic perspectives.It alsofocuses on the regional comparative study in order to grasp the debt efficiency characteristics of local government financing companies from a more comprehensive,in-depth and multi perspective.Firstly,this paper combs the theory of public goods in economics,which lays a theoretical foundation for the research of the whole paper.Then,it briefly introduces the basic characteristics of the local government financing companies in China,and on this basis,this paper defines the debt efficiency of financing companies,and then combs the development process of financing platform,summarizes that the local financing companies are facing two major tests: the stricter external environment and the insufficient internal control.Next,this paper makes an empirical study on the debt efficiency of local financing companies in China.Firstly,140 provincial-level local government financing companies are selected as samples,total liabilities and main business costs are selected as input indicators,net operating cash flow,net profit and main business income are selected as output indicators to evaluate and analyze the economic efficiency of financing companies’ debts.Then take the financing companies that have issued urban investment bonds in31 provinces and autonomous regions as the samples,select the increment of interest bearing debt as the input index,and select the increment of the following six indexes as the output index: daily average treatment capacity of urban sewage,urban green space area,special vehicle equipment for urban appearance and environmental sanitation,comprehensive production capacity of water supply,total amount of natural gas supply,public transport vehicles for every 10000 people.Through the above samples and index system to evaluate and analyze the social efficiency of financing company debt.On this basis,it also makes a comparative analysis of the economic efficiency and social efficiency of the debt of financing companies,as well as the regional comparative analysis of the debt efficiency of financing companies.The results show that:(1)the debt efficiency of local government financing companies in China is in a nonDEA efficient state as a whole,and the economic efficiency of debt is better than the social efficiency;(2)the pure technical efficiency determined by the company system and management level is the most important factor restricting the debt efficiency of local government financing companies;(3)the debt efficiency of financing companies in eastern China is the best,and the debt efficiency of financing companies in the western region is the worst,facing the most difficulties,which should be focused on.Finally,this paper puts forward some suggestions to improve the debt efficiency of local government financing companies: local government financing companies should accelerate the construction of an independent market-oriented governance system,clarify the relationship with the government,and improve the efficiency of the use of funds;the central government should perfect the top-level design of debt governance;the local government should take measures according to local conditions,take appropriate measures and combine with the actual situation of each region to issue a comprehensive governance plan for recessive debt as soon as possible.