Identifying Local Government Hidden Debt Based On The Financing Behavior Of Urban Investment And Construction Enterprise

The implicit debt of local government refers to the debt that is directly or promised to be repaid with financial funds,or illegally provided with guarantees,beyond the legal limit or issuance form of the local government.As extra-budgetary fiscal activities will trigger fiscal opportunism,and the explicit government debt will lead to a surge of fiscal risks and major financial risks,the government’s implicit debt risk has attracted great attention from academia and government departments.In order to effectively prevent and resolve local hidden debt risks,effective identification is an important prerequisite.The academic research on the definition and identification methods of implicit debt mainly starts from its formation path,including the initial motivation,micromechanism and institutional factors.The current research direction is to explore the initial motivation for the formation of hidden debt or to analyze the specific micromechanism.However,there are few studies based on the perspective of institutional factors.Under my country’s corporate bond market issuance review system,the financing behavior of urban investment enterprises has been distorted to a certain extent,and inferring the financing motives of enterprises from the perspective of the characteristics of application and review projects may provide new ideas for directly controlling the scale of hidden debts;at the same time,in the practical stage,the determination of whether to design new hidden debts occurs at the project level,and the granularity needs to be further refined.In response to this research situation,this thesis selects a case of a company in Nanjing’s private equity bond issuance as the research object,tries to establish the relationship between the financing behavior of urban investment companies and the implicit debt of local governments,tease the audit focus of the regulator for the program possibly related to local government implicit debt,and uses the method of empirical analysis to verify and obtain Conclusion: In the qualitative analysis part,this thesis firstly lists the institutional environment of my country’s corporate bond issuance,and clarifies that the current review focus of regulatory agencies is divided into two categories: regional factors and the issuer’s own factors: the regional factors include regional financial strength and debt burden.The issuer’s own factors mainly include profitability,solvency and historical debt issuance,etc.Then,analyse the application materials of the case of private equity corporate bond issuance by a city investment company in Nanjing selected in this article from the regulator’s point of view,following the same logic as the previous analysis: first of all,from the issuer’s location Pukou District,Nanjing City,Jiangsu Province,analyzes the relative financial strength and debt burden of each administrative division level,and then pays attention to profitability sustainability,solvency and key accounting subjects,comprehensively evaluates the issuer’s actual financing needs,and finally draws the current period.Conclusions on whether the debt may involve new government implicit debt.Combined with the research results of the case analysis part,in the empirical analysis part,we establishes a financing behavior model of implicit debt risk enterprises:the implicit debt ratio of each district in Nanjing in 2020 is used as the explained variable,and the explanatory variables are divided into the debt burden of the area under investigation.and the regional factors of project approval,institutional factors for judging the degree of compliance between corporate financing behavior and issuance system in the region,and the issuer’s own marketization degree and historical bond issuance,etc.The data of Nanjing’s 2020 corporate bond issuance review is used as the statistical object to conduct regression analysis to verify the validity of the model.According to the regression results of the implicit debt model of financing risk,some proxy variables in regional factors,institutional factors and self factors are significant at the level of 1%,which shows that the model is effective within the sample range,and provides an idea for regulators to monitor the debt risk of districts and counties.According to the conclusions drawn in the case analysis and the regression results of the empirical research,in the conclusion and outlook,puts forward suggestions for regulators and the overall market: From the perspective of audit methods,appropriate screening conditions should be selected to establish a focus list to prevent systematic There is an implicit risk of debt scale expansion,and the future system design direction should abandon rigid indicators and focus on evaluating the financing needs of enterprises;in addition,as other components of the market,urban investment companies should actively participate in market-oriented transformation,information disclosure and credit rating systems.Continuous improvement is required.