Geography, Politics And Debt Leverage

According to the current situation of China's financial development,the abundant financial resources supply is often concentrated in the periphery of central cities with good financial development.At the national level,such as Beijing,Shanghai and Shenzhen,provincial-level financial centers are mostly concentrated in provincial capitals or vice provincial cities with better economic development.In contrast,non-central cities at the prefecture and county level,which are developing rapidly,are obviously short of the inclination of financial resources,which leads to the obvious unbalanced situation of financial resources supply from the geographical distribution.In recent years,China's real economy is facing a lot of difficulties in the transition period.Such pains of development will worsen the profitability of enterprises and lead to difficulties in debt financing,especially for those manufacturing enterprises in non-central cities.However,such enterprises that are not located in central cities often support the development of local economy,and their political and social contributions to local employment and other aspects cannot be ignored.The purpose of this study is to solve the debt financing dilemma faced by manufacturing enterprises far away from central cities.This paper tries to analyze the relationship between the two factors and the level of corporate debt leverage by analyzing the geographical location of the city where the enterprise is located and the political factors of the city.This paper argues that the farther the distance between the city where the listed manufacturing enterprises are located and the central city of the province,the lower the debt leverage level of the enterprises will be.At the same time,the higher the political influence of government leaders in the city where the enterprise is located,the greater the contribution of the enterprise to the political society of the city and the higher the debt leverage level of the enterprise.In this paper,the above viewpoints are analyzed and studied by means of empirical research.A series of enterprise financial data indicators and enterprise related information are selected.The surface distance between the city and the central city in the province is calculated by using the formula.On this basis,the conclusion of this paper is drawn,which confirms the viewpoint of this paper.Finally,this paper combines the status quo of China's financial development,respectively from the perspective of government policy and enterprise strategy put forward countermeasures and Suggestions.