Research On The Influence Of Land Transfer Revenue On The Credit Risk Premium Of Urban Investment Bond

The scale of China’s urban investment bond is expanding and credit risk is accumulating.How to prevent and resolve the credit risk of urban investment bond is an important practical issue.The credit risk premium of urban investment bond is a compensation for the credit risk borne by investors,and the higher the credit risk,the higher the credit risk premium demanded by investors.At present,there are fewer substantial defaults on urban investment bond,and reducing the credit risk premium of it has become an effective option to control the credit risk.As an important source of debt service for urban investment bond,land transfer revenue is an important factor affecting the credit risk premium of urban investment bond.However,less attention has been paid to the impact of land transfer revenue on the credit risk premium of urban investment bond in the existing literature.Therefore,the thesis investigates the factors influencing the credit risk premium of urban investment bond from the perspective of land transfer revenue.Information asymmetry theory and financing guarantee theory are the theoretical basis for the empirical study.The increase in land transfer revenue improves the repayment ability of urban investment bond by increasing the implicit warranty capacity,increasing the guarantee value of land,and increasing the size of urban investment companies’ own assets,which in turn reduces the information asymmetry between investors and bond issuers Investors’ confidence in the ability of urban investment bond to repay on time will increase,which will reduce the level of credit risk premium demanded from bond issuers.In Terms of empirical analysis,the thesis empirically analyzes the impact of land transfer revenue on the credit risk premium of urban investment bond based on the data of bonds issued by municipalities from 2009 to 2020.The study method is mixed cross-sectional data OLS regression and moderating effect model.The results are as follows:(1)The increase in land transfer revenue reduces the credit risk premium of urban investment bond,indicating a strong reliance on land transfer revenue for repayment of urban investment bond;(2)The higher the volatility of land transfer revenue,the higher the credit risk premium of municipal bond;(3)The marketization l evel of urban investment bond is low,the improvement of local government revenue can significantly reduce the credit risk premium,while the financial factors of company have no significant impact on it;(4)There is heterogeneity in the impact of land transfer revenue on the credit risk premium of bond.The impact is more significant at lower financial development levels and lower credit rating;(5)There is a positive moderating effect of land finance dependence on the relationship between land transfer revenue and credit premium of municipal.Based on the above research results,the thesis puts forward the following recommendations to prevent the credit risk of urban investment bond:(1)Reducing the dependence of local governments on land finance;(2)Maintaining the stability of the land market;(3)Regulating local governments’ debt raising behavior;(4)Accelerate the marketoriented transformation of urban investment companies.