Research On The Relationship Between Local Government’s Self Issuance Of Bonds And The Stability Of Local Economic Growth

Local government borrowing plays a crucial role in the local financial system and is an important part of ensuring the orderly development of the national economy.After the establishment of the People’s Republic of China,the central government was fully responsible for local government borrowing.It was not until 1992 that the local government borrowing method evolved into the urban investment bond model and the central agency issuance model,achieving institutional innovation.At present,the autonomous bond issuance model of local governments in developed Western countries is very mature,and the local government bond issuance model in China is also constantly improving.In October 2011,under the guidance of the National Development and Reform Commission,Shanghai,Zhejiang,Guangdong,and Shenzhen began pilot projects for self issuance of bonds.By 2014,six provinces and cities including Shandong and Jiangsu had also joined the pilot list.This self issuance reform pilot is different from the true self issuance of bonds,and the scale and method of issuing bonds still require approval from the central government.However,this pilot still fully enhances the flexibility and freedom of local government financing,and is an important milestone for China to move towards the model of local government self issuance of bonds.Many scholars have conducted sufficient research on the pilot of self issuance of bonds,but currently,research on local government self issuance mainly focuses on policy aspects,and has not yet linked the self issuance policy with the regional economic situation,which is a major deficiency in current research.The issue studied in this paper is the impact of local governments’ self issuance of bonds on the stability of local economic growth.In addition,this paper also studies the Mesomeric effect of industrial structure adjustment in this process.The research in this article has certain significance.Firstly,it combines the pilot policy of local government self issuance of bonds with the stability of local economic growth,explores the impact of policies on economic growth stability,and aligns with the background of recent attention to local debt and the desire for stable recovery of local economy in the post pandemic era.Secondly,the aim of this article is to fully leverage the role of local government self issuance of bonds and improve local economy.This article also selects industrial structure adjustment as an intermediary variable,which is innovative.This article uses a combination of empirical research and theoretical argumentation to identify intermediary variables,and the research method is reasonable.This article empirically finds that the policy of local governments issuing bonds on their own has a positive impact on the stability of local economic growth,and industrial structure adjustment serves as an intermediary.This also indicates that there is a close connection between the three,which can achieve synergy among flexible local borrowing,optimization of industrial structure,and stable local economic growth.In the post pandemic era,the scope of self issuance pilot projects should be expanded,and the advantages of local government borrowing should be fully utilized to inject momentum into economic recovery and stable growth.In addition,attention should be paid to the intermediary role of industrial structure between local debt financing and local economy,to enhance the flexibility of local government investment,and fully achieve the unity of local financial market development,industrial structure optimization,and stable economic growth.