Local Government Debt And Commercial Credit Supply Of Listed Companies

The expansion of local government debt has caused a large amount of funds from commercial banks and other financial institutions to flow into governmental projects(such as infrastructure construction)with higher returns and lower risks,thus crowding out credit resources and increasing the financing constraints of SMEs.Coupled with the pull of local government debt on private investment,this has greatly increased the demand for commercial credit from SMEs that have difficulty obtaining funds from formal financial channels,and based on short-term arbitrage motives,large enterprises such as listed companies are willing to provide more commercial credit.In order to explore the influence of local government debt on the behavior of micro enterprises,this thesis establishes an empirical model of local government debt and the supply of commercial credit to listed companies from 2012-2021 for analysis and research,and explores the influence mechanism.Through the empirical study,it is found that the higher the level of local government debt,the more the supply of commercial credit for listed companies in the region,indicating that a positive correlation exists between them.Further,this thesis investigates the influence mechanism of local government debt on the supply of commercial credit to listed companies.When the enterprises are subject to higher financing constraints,the idle capital of enterprises decreases,and the promotion effect of local government debt on commercial credit supply decreases at this time.The companies with weaker bargaining power are more likely to be promoted by changes in local government debt to provide commercial credit.The higher the availability of bank borrowing,the stronger the promotion effect of local government debt on commercial credit supply.When the nature of enterprise ownership is state-owned enterprises,the promotion effect of local government debt on commercial credit supply is weakened.Finally,this thesis confirms the robustness of the empirical analysis by replacing the independent variables,changing the sample size,changing the model setting and using the instrumental variables method.By studying the impact of local government debt on commercial credit supply,the micro effects of local government debt can be effectively interpreted.The study not only enriches the factors affecting the financing constraints of small and medium-sized enterprises(SMEs),but also has important implications for solving the problem of financing constraints of SMEs in China and addressing the negative effects brought by local government debt.In addition,by studying the relationship between local government debt and commercial credit,this thesis enriches the factors influencing the supply of commercial credit to enterprises and the theory of reallocation of commercial credit resources.At the same time,the study of the relationship between the two can deeply explore the path of local government debt expansion to promote the financialization of non-financial enterprises,which is important for effectively solving the problem of financialization of non-financial enterprises.