Crowding in or crowding out? How local government debt influences corporate innovation for China

The pressure upon local governments to redeem their debt could affect government fiscal ability. It could consequently affect their fiscal policies on corporations, which might distort corporate innovation. Based on the data of Chinese Shanghai and Shenzhen A-share listed companies and the local gov...

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Autores principales:	Junbing Xu, Yuanyuan Li, Dawei Feng, Zhouyi Wu, Yang He
Formato:	article
Lenguaje:	EN
Publicado:	Public Library of Science (PLoS) 2021
Materias:	Medicine R Science Q
Acceso en línea:	https://doaj.org/article/0ccfc0cc52594e9da03215af07aefb3c
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spelling	oai:doaj.org-article:0ccfc0cc52594e9da03215af07aefb3c2021-11-18T06:22:36ZCrowding in or crowding out? How local government debt influences corporate innovation for China1932-6203https://doaj.org/article/0ccfc0cc52594e9da03215af07aefb3c2021-01-01T00:00:00Zhttps://www.ncbi.nlm.nih.gov/pmc/articles/PMC8575287/?tool=EBIhttps://doaj.org/toc/1932-6203The pressure upon local governments to redeem their debt could affect government fiscal ability. It could consequently affect their fiscal policies on corporations, which might distort corporate innovation. Based on the data of Chinese Shanghai and Shenzhen A-share listed companies and the local government implicit short-term debt financed by local government financing vehicles (LGFVs) in 31 provinces, this paper shows that local government debt (LGD) negatively affects corporate R&D investment in China, thereby suggesting a strong crowding-out effect. The crowding-out effect is more pronounced when the firm is a non-state-owned enterprise (NSOE), the firm’s size is small, the firm’s age is young, or the firm is in the lower market competition. This paper provide evidence by interacting the terms that local government actions, such as consumption of fiscal resources, strengthening tax collection efforts, or consumption of credit resources, might partially account for the crowding-out effect. This study illustrates the innovation costs of local government debt.Junbing XuYuanyuan LiDawei FengZhouyi WuYang HePublic Library of Science (PLoS)articleMedicineRScienceQENPLoS ONE, Vol 16, Iss 11 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	Medicine R Science Q
spellingShingle	Medicine R Science Q Junbing Xu Yuanyuan Li Dawei Feng Zhouyi Wu Yang He Crowding in or crowding out? How local government debt influences corporate innovation for China
description	The pressure upon local governments to redeem their debt could affect government fiscal ability. It could consequently affect their fiscal policies on corporations, which might distort corporate innovation. Based on the data of Chinese Shanghai and Shenzhen A-share listed companies and the local government implicit short-term debt financed by local government financing vehicles (LGFVs) in 31 provinces, this paper shows that local government debt (LGD) negatively affects corporate R&D investment in China, thereby suggesting a strong crowding-out effect. The crowding-out effect is more pronounced when the firm is a non-state-owned enterprise (NSOE), the firm’s size is small, the firm’s age is young, or the firm is in the lower market competition. This paper provide evidence by interacting the terms that local government actions, such as consumption of fiscal resources, strengthening tax collection efforts, or consumption of credit resources, might partially account for the crowding-out effect. This study illustrates the innovation costs of local government debt.
format	article
author	Junbing Xu Yuanyuan Li Dawei Feng Zhouyi Wu Yang He
author_facet	Junbing Xu Yuanyuan Li Dawei Feng Zhouyi Wu Yang He
author_sort	Junbing Xu
title	Crowding in or crowding out? How local government debt influences corporate innovation for China
title_short	Crowding in or crowding out? How local government debt influences corporate innovation for China
title_full	Crowding in or crowding out? How local government debt influences corporate innovation for China
title_fullStr	Crowding in or crowding out? How local government debt influences corporate innovation for China
title_full_unstemmed	Crowding in or crowding out? How local government debt influences corporate innovation for China
title_sort	crowding in or crowding out? how local government debt influences corporate innovation for china
publisher	Public Library of Science (PLoS)
publishDate	2021
url	https://doaj.org/article/0ccfc0cc52594e9da03215af07aefb3c
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Crowding in or crowding out? How local government debt influences corporate innovation for China

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