Does The Expansion Of Local Government Debt Affect The Stickiness Of Administrative Expenses?

The debt burden of local governments in China is too heavy and the leverage ratio remains high.Although local government debt helps to strengthen municipal infrastructure construction and promote economic development,the blind expansion of local government debt not only has an impact on macroeconomic growth,but also worsens the overall allocation efficiency of the capital market,which is not conducive to the development of micro-enterprises.The expansion of local government debt will reduce the financing scale of enterprises,increase the financing cost of enterprises,and make enterprises fall into the dilemma of "difficult and expensive financing".In addition,the risks caused by the blind expansion of local government debt will eventually be transmitted to the real economic sector,which will destroy the stability of the business environment.It has been confirmed that the problem of expense stickiness is widespread in Chinese enterprises,and excessive expense stickiness will reduce the operating efficiency of enterprises.The continuous growth of local government debt will destroy the financing and operating environment of enterprises.In order to maintain and improve the performance of enterprises and maintain their reputation,the management will take actions to win financing for enterprises and reduce the uncertainty of the environment.So,how does the expansion of local government debt affect the administrative expense stickiness of enterprises?This paper combines the extrusion effect theory,rent-seeking theory and principal-agent theory to analyze the impact of local government debt expansion on the stickiness of enterprise management costs.In this impact,rent-seeking and environmental uncertainty play a role in mechanism transmission,and then selects the A-share non-financial listed companies in 20102019 as the research object to test;In the further study,this thesis examines the regulatory effects of financing constraints,agency costs,managers’ ability and internal and external governance,so as to analyze the differences in the degree of influence of local government debt expansion on the stickiness of enterprise administrative expenses in different situations;At the same time,it analyzes the heterogeneity of regional financial development level,and verifies the supervisory role of the central inspection system.Based on the above research,this thesis draws the following conclusions:China’s listed companies generally have administrative expense stickiness,and the expansion of local government debt increases the administrative expense stickiness of enterprises.Among the companies with strong financing constraints and high agency costs,local government debt plays a more significant role in improving the stickiness of enterprise expenses.Hiring managers with high ability and establishing perfect internal and external governance mechanisms can alleviate the impact of local government debt expansion on the stickiness of enterprise administrative expenses;In areas with high financial development level,the catalytic effect of local government debt on the stickiness of enterprise administrative expenses has been alleviated;The central inspection system has played a supervisory role,weakening the impact of local government debt expansion on the stickiness of administrative expense.The above conclusions have passed the robustness test of autocorrelation and heteroscedasticity of control sequence,replacement of explanatory variables,deletion of enterprise samples in municipalities directly under the Central Government and change of the analysis interval of samples.The research in this paper expands the relevant research on the impact of local government debt expansion on micro-enterprise behavior,and based on the research results,puts forward relevant suggestions from the micro-enterprise,local government and national levels,which has certain enlightenment.