Local Government Debt Expansion,Government Subsidies And Debt Financing Of Listed Companies

In recent years,the scale of China’s local government debt has grown rapidly,and government debt has played an active role in filling the gap,strengthening infrastructure,and promoting development;However,due to the rapid growth of the scale,the debt risk continues to accumulate and become more and more prominent,and it has become a possible "gray rhino" in my country’s economy.At the same time,the huge capital demand generated by local government borrowing may affect the financing needs of the corporate sector through the transmission of the financial market.The financial resources of the whole society are limited on the whole.When local government financing demand rises sharply and local government credit is good,banks will prefer local governments,squeezing credit resources originally belonging to companies to a certain extent,thereby reducing The level of debt financing of the company.In this context,the government subsidies obtained by the company,as a government’s recognition of the company’s future well-functioning,can play an implicit guarantee and send a positive signal to the financial market,thereby increasing the trust of banks and other financial institutions in the company And classified it as a high-quality borrower,making it easy for the company to obtain credit funds from banks and other financial institutions,thereby improving the company’s debt financing capabilities.Therefore,the question that this article focuses on is:Does the expansion of local government debt have a crowding-out effect on the level of corporate debt financing?Do government subsidies play a moderating role in the relationship between the expansion of local government debt and the level of corporate debt financing?This paper takes China’s A-share non-financial listed companies from 2009 to 2019 as a sample,and constructs unbalanced panel data based on the province where the company is registered to match local government debt and other macro variables,and empirically analyzes the scale of local government debt,government subsidies and corporate liabilities The relationship between financing levels:and further explore the moderating role of government subsidies in the relationship between the scale of local government debt and the level of corporate debt financing under different property rights and different regional marketization processes.The research results show that:(1)The scale of local government debt is negatively correlated with the level of corporate debt financing.(2)Government subsidies play a negative regulatory role in the relationship between the scale of local government debt and the level of corporate debt financing.The above results are still present after a series of robustness tests such as replacing key explanatory variables and lagging explanatory variables by one period,and The regulatory effect is more pronounced in non-state-owned enterprises and regions with a low marketization process.This article provides theoretical and empirical support for rationally controlling the scale of local government debt,guiding the coordinated development of government financing and private financing,and,perfecting the financial market and improving the financing ability of enterprises.