The Impact Of Regional Financial Development On The Issuing Of Local Treasury Bonds

In the current fiscal decentralization system,China's local finances assume more responsibility to expend,local governments have to seek financing by issuing bonds through various ways to deal with fiscal imbalance and boost local economy.Some scholars have found that local governments of regions with higher level of financial development are often relatively easier to get funds from banks and issue bonds.To explore the impact of regional financial development on the issuing of local treasury bonds,this paper analyses and finds out the transmission mechanism and expected impact of regional financial development on local treasury bonds based on previous studies and relevant theories of financial development.This paper also sets up models to analyze the impact with appropriate economic indicators as empirical research data source.Finally,according to case study,empirical analysis results and theoretical analysis,this paper discusses underlying reasons and transmission mechanism.The Samples of the research object include size and interest rates of quasi-municipal bonds issued by China's provinces and new government bonds issued by China's provinces.The object of the case study is the Xiamen's government debt data and the problems existing in the debt issuance of government.According to case study and empirical analysis results,we have found:First,the scale and efficiency of regional financial development have a significant impact on the issue size of quasi-municipal bonds.The results are consistent with theoretical analysis.Second,the scale and efficiency of regional financial development have a significant impact on new government bonds,but the impact is different from that on quasi-municipal bonds.This is mainly because the size of new government bonds depends on the Ministry of Finance.The decision of Ministry of Finance is indirectly effected by local financial development level as well as other significant factors.Third,the structure of regional financial development have a significant impact on the interest rate of government bonds.Fourth,financial development almost has no impact on and shows no clear correlation with new debt in Xiamen.But there is certain correlation between financial development and Xiamen's outstanding debt in the overall trend.The significance of this paper is not only exploring the impact of regional financial development on the issuing of local treasury bonds through quantitative and qualitative research,but also combining with the case of Xiamen and the actual work.This paper puts forward policy recommendations from the perspective of regional financial development,such as making full use of the level of regional financial development and guiding the improvement of regional financial markets to properly address the financing needs of local governments and promote the transfer of local government bonds.It has very strong practical significance.