Research On The Influence Of Local Government Debt On Regional Economic Growth

In recent years,the scale of local government debt has been rising steadily,while the economic growth rate has been slowing down.The debt burden ratio of local government has been increasing,and the debt default situation has also occurred many times.This not only affects the credibility of the local government,has also led people to think of local government debt problem,the most important of which is to clarify the local government debt and the relationship between economic growth,study the effects of local government debt path by which economic growth,thus to put forward the management of local government debt targeted Suggestions.Based on the growth accounting theory,this paper expounds the effect mechanism of local government debt on economic growth from two perspectives of investment and total factor productivity.Secondly,this paper not only makes a detailed analysis of the current situation of local government debt and the reasons for its expansion,but also expounds the current situation of economic development,so as to preliminarily understand the reality of local government debt and economic growth.To further study the relationship between the two,this paper uses panel data of 29 provinces,municipalities and autonomous regions in China from 2009 to 2020 to study the impact of local government debt on China’s economic growth from the perspective of debt increment.It is found that the increment of local government debt has nonlinear influence on economic growth.When the debt is below the threshold,the expansion of local government debt can significantly stimulate economic growth,while when the debt is above the threshold,the expansion of local government debt can restrain economic growth.Investment and total factor productivity play a partial intermediary role in the process of local government debt affecting economic growth.Considering that after the official implementation of the new Budget Law in2015,local governments were endowed with the right to issue local government bonds within the limit,and the financing function of financing platforms for local governments was gradually stripped off,in order to discuss whether the impact of local government debt on economic growth has changed after 2015,This paper selects data from 2015 to 2020 for further analysis.The results show that the impact of the incremental level of local government debt on economic growth has not changed since2015,and still presents an inverted U-shaped non-linear effect.In order to investigate the impact of debt stock on economic growth,this paper selects data from 2015 to2020 and finds that local government debt stock is not conducive to economic growth.When the relationship between local government debt and economic growth is studied by dividing different regions,it is found that there is regional heterogeneity in the impact of local government debt on economic growth.When analyzing regional heterogeneity from the perspective of debt increment,it is found that the inflection point of debt in central and western regions is higher than that in eastern regions,indicating regional heterogeneity.From the perspective of debt stock level,debt stock has a negative inhibition effect on the economic growth of the eastern and central and western regions,and this negative inhibition effect is more serious in the eastern region.