Soft Budget Constraint And Government Financing Behavior

China's current fiscal and taxation system exists the problem that the local government financial rights and authority do not match.At the same time,with the urbanization process continues to advance,the local government financing demand is growing.Especially since the global financial crisis in 2008,driven by the 4 trillion economic stimulus plan,the local government financing needs continue to increase.the local government debt balance continues to expand,and local government debt risk highlights.Local government financing is often dependent on government credit,and exists a strong budget soft constraints through providing the hidden or show security to government debt.It is of great theoretical and practical significance to study the relevant problems of local government financing behavior and to advise on how to regulate the administration of local government debt.This paper studies the financing behavior of local governments from the perspective of quasi-municipal bond,and analyzes the influence of local public budget income on the credit spread of quasi-municipal bond,through the quasi-municipal bond,data issued by local government financing platform in 2008-2016.It is found that:(1)the local government's public budget income is negatively correlated with the credit spread of the city investment bond,which indicates that the local government has guarantee the city investment debt,and this guarantee still exists after the promulgation of the State Council No.43;(2)the administrative level of the local government financing platform has a significant impact on the credit spreads of the city investment bonds,and the higher the administrative level of the financing platform,the lower the spread;(3)the macro environment,bonds Characteristics and the issuer's asset-liability ratio will have a significant impact on the issuance of investment bonds,but the profitability of local government financing platform will not have a significant impact on the issuance of investment bonds,reflecting the city as a local government Financing platform,the shape of "company" is actually "financing tools" realistic characteristics.Based on the conclusion of this study,this paper argues that the key to regulating local government financing is to harden the budget constraints of local governments.Based on this,we put forward relevant policy recommendations.