The Impact of Local Government Debt on Corporate Risk-taking
DOI:
https://doi.org/10.54097/tbjc2j02Keywords:
Local government debt risk, Corporate risk-taking, Crowding-out effect, Financing constraintsAbstract
As the scale of local government debt continues to expand, it is necessary to explore the impact of local government debt on corporate micro-behavior.Based on the data of A-share listed companies from 2011 to 2021, this paper empirically examines the impact and mechanism of local government debt on corporate risk-taking, and the above conclusions are justified after a series of robustness tests.It is found that local government debt reduces firm risk-taking and that financing constraints partially mediate this effect.Further analysis reveals that the risk-taking level of mature firms is significantly affected by the negative impact of local government debt. The research in this paper provides empirical evidence for mitigating local government debt risk.
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