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Fiscal decentralization, local government debt, and corporate innovation

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  • Li, Sen
  • Qi, Tiancheng

Abstract

Based on the panel data of Chinese non-financial listed companies, this paper empirically examines the impact of fiscal decentralization on corporate innovation activities and analyzes the moderating role of local government debt in the relationship between fiscal decentralization and corporate innovation. The study finds that fiscal decentralization has a facilitating effect on corporate innovation activities, but the accompanying increase in the level of local government debt will intensify corporate financing constraints, thus having a certain crowding-out effect on corporate innovation activities. This study not only provides guidance on corporate governance, but also provides a reference for institutional reform related to fiscal decentralization and local government debt

Suggested Citation

  • Li, Sen & Qi, Tiancheng, 2023. "Fiscal decentralization, local government debt, and corporate innovation," Finance Research Letters, Elsevier, vol. 54(C).
    • Handle: RePEc:eee:finlet:v:54:y:2023:i:c:s154461232300137x
    DOI: 10.1016/j.frl.2023.103764
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    References listed on IDEAS

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    Cited by:

    1. Mengkai Chen & Ting Chen & Debao Ruan & Xiaowei Wang, 2023. "Land Finance, Real Estate Market, and Local Government Debt Risk: Evidence from China," Land, MDPI, vol. 12(8), pages 1-18, August.

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