Research On The Influence Of Local Government On The Pricing Of Local Government Bonds

With the continuous development of China's economy,the supply level of public goods and public services in various regions has been improved,while the debt problem of local governments has become increasingly obvious.In order to solve the debt problem of local governments,the steady economic development,the issuance of local government bonds is the only way for China.The issuing history of local government bonds in China is later than that in western capitalist countries.Since the promulgation of the budget law in 1994,the issuing of local government bonds has gone through three stages: issuing on behalf of others,voluntary paying off on behalf of others,and spontaneous paying off on behalf of others.The promulgation of the new budget law in 2015 marks that local government bonds have become the only legal means for local governments to borrow money.Based on the above background,this paper aims to analyze the influence of local government finance on the local government bond issue pricing based on the influencing factors of local government bond issue pricing,and put forward corresponding policy suggestions from the perspective of government finance.Therefore,the author first combs the economic theory behind the issuance and pricing of local government bonds,providing theoretical basis and research ideas for the research of this paper.After sorting out,it is found that after 1994,the financial power moved up,the administrative power moved down,and the local government each took the profit and loss,resulting in the current situation of mismatch between the administrative power and the expenditure responsibility(financial decentralization theory).China's financial and economic reform is inevitable Yes,in the current period of China's economic transition,the issuance of local government bonds is an important means to make up the local government deficit and accelerate economic development(Keynes' s effective demand theory),so as to better play the basic function of providing public goods and services(public goods theory).In addition,the local government bonds have the general characteristics of bonds,comply with the relationship between risk and cost(risk and cost theory),and have its particularity: the issuing subject is the local government,which needs to carry out corresponding issuance and management supervision(government management theory)according to the local government's judgment on the economic development of the region and the requirements of the central government leadership.At the same time,the above-mentioned economic theory also It laid the foundation for the proposal.Secondly,collect the data of current local government bonds since issuance(i.e.2015-2018),and collect the relevant data of 4250 local government bonds' issuance interest rate,issuance period,number of issuance and issuance scale.On this basis,make statistics,analysis and summary of the actual situation of local government bonds issuance in China.According to the current situation,during the issuance process of local government bonds in China Sort out,classify and summarize the possible problems.Finally,the interest margin formed by subtracting the interest rate of 4250 local government bonds and the yield to maturity of government bonds is taken as the explanatory variable,and the local government finance is taken as the core explanatory variable of this paper.The other two control explanatory factors are introduced: market environment and the characteristics of the bonds themselves,so as to analyze the local finance as the pricing method of local government bonds Degree of impact.Through the empirical analysis,from the perspective of government finance,economic growth,financial self-sufficiency rate,fiscal decentralization and fiscal transparency have a significant impact on the interest margin of local government bond issuance,and the faster the economic growth,the higher the financial self-sufficiency rate,the better the information disclosure,the clearer the central government's expenditure responsibility,the smaller the interest margin of local government bond issuance.Based on the relevant theories and the results of empirical analysis,this paper puts forward the corresponding policy suggestions from the perspective of local government finance(economic and non economic aspects)to reduce the issue price of local government bonds: first,economic aspects: improving regional policies;accelerating the transformation of new and old economic momentum and strengthening the construction of financial resources;Second,non economic actions: forming a budget system with strong constraints,improving the credit rating system of local government bonds,forcing local government information disclosure and gradually refining the main body of issuing bonds.