IDEAS home Printed from https://ideas.repec.org/a/eee/finlet/v81y2025ics1544612325007172.html

The impact of local government debt on rural green transformation

Author

Listed:
  • Jia, Nan
  • Zhang, Hongli
  • Ma, Weigang

Abstract

This study examines the impact of local government debt on rural green economy transition through panel data analysis. The results show that there is an inverted U-shaped non-linear relationship between local government debt and rural green economy transition, with debt facilitating the transition at low rural development levels but negatively affecting it at high development levels. The level of rural development is an important threshold variable that influences the mechanism of action of debt. Rural capital allocation plays a mediating role at low levels of development, but the mediating effect is not significant at high levels of development. It is suggested that local governments should reasonably control the scale of debt according to the stage of rural development, optimise the allocation of funds, improve the efficiency of investment, and formulate fiscal policies in a phased manner, so as to promote the sustainable development of rural green economy.

Suggested Citation

  • Jia, Nan & Zhang, Hongli & Ma, Weigang, 2025. "The impact of local government debt on rural green transformation," Finance Research Letters, Elsevier, vol. 81(C).
    • Handle: RePEc:eee:finlet:v:81:y:2025:i:c:s1544612325007172
    DOI: 10.1016/j.frl.2025.107458
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1544612325007172
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.frl.2025.107458?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Chen, Suyun & Li, Zongze & Xie, Feixue & Xu, Xiaofang, 2024. "The signaling effect of local government debt: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 95(PA).
    2. Kai-di Liu & Minghui Jin & Liang Cheng, 2025. "County green transformation: how does gross ecosystem product assessment promote common prosperity?," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-15, December.
    3. Gertler, Mark, 1999. "Government debt and social security in a life-cycle economy," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 50(1), pages 61-110, June.
    4. Xiuju Feng & Yunchen Zheng & Woraphon Yamaka & Jianxu Liu, 2024. "How Does Agricultural Green Transformation Improve Residents’ Health? Empirical Evidence from China," Agriculture, MDPI, vol. 14(7), pages 1-15, July.
    5. Cristina Checherita-Westphal & Philipp Rother, 2011. "The Impact of Government Debt on Growth. An Empirical Investigation for the Euro Area," Revue économique, Presses de Sciences-Po, vol. 62(6), pages 1015-1029.
    6. Eberechukwu Onukwugha & Jason Bergtold & Rahul Jain, 2015. "A Primer on Marginal Effects—Part I: Theory and Formulae," PharmacoEconomics, Springer, vol. 33(1), pages 25-30, January.
    7. Zhenyu Qi & Yuezhou You, 2024. "The Impact of the Rural Digital Economy on Agricultural Green Development and Its Mechanism: Empirical Evidence from China," Sustainability, MDPI, vol. 16(9), pages 1-23, April.
    8. Ziang Lin & Xin Wang & Zhili Wang, 2025. "Local Government Debt and Corporate Fraud: Evidence from China," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 61(6), pages 1614-1629, May.
    9. Christiane Naumann, 2014. "Stability and Transformation in a South African Landscape: Rural Livelihoods, Governmental Interventions and Agro-Economic Change in Thaba Nchu," Journal of Southern African Studies, Taylor & Francis Journals, vol. 40(1), pages 41-57, January.
    10. Steve Wiggins & Sharon Proctor, 2001. "How Special Are Rural Areas? The Economic Implications of Location for Rural Development," Development Policy Review, Overseas Development Institute, vol. 19(4), pages 427-436, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zhao, Jingjing & Gao, Yuan & Deng, Yao & Zhao, Huifeng, 2025. "Does agricultural green transformation enhance the quality of export products? A perspective of market-oriented environmental regulation," Finance Research Letters, Elsevier, vol. 85(PE).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Liu, Qiang & Mao, Yidan & Zhang, Yefeng & Xiong, Zhengling, 2025. "Targeted fiscal policy and corporate investment: Evidence from the special bonds in China," Pacific-Basin Finance Journal, Elsevier, vol. 93(C).
    2. Zhiyuan Ma & Jun Wen & Yanqi Huang & Peifen Zhuang, 2025. "Analyzing Spatiotemporal Variations and Influencing Factors in Low-Carbon Green Agriculture Development: Empirical Evidence from 30 Chinese Districts," Agriculture, MDPI, vol. 15(17), pages 1-36, August.
    3. Rana Sajedi & Gregory Thwaites, 2016. "Why Are Real Interest Rates So Low? The Role of the Relative Price of Investment Goods," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 64(4), pages 635-659, November.
    4. Basso, Henrique S. & Jimeno, Juan F., 2021. "From secular stagnation to robocalypse? Implications of demographic and technological changes," Journal of Monetary Economics, Elsevier, vol. 117(C), pages 833-847.
    5. Paul Beaudry & Katsiaryna Kartashova & Césaire A Meh, 2022. "Gazing at r*: A Hysteresis Perspective," RBA Annual Conference Papers acp2022-08, Reserve Bank of Australia, revised Dec 2022.
    6. Scott Loveridge & Dusan Paredes, 2018. "Are Rural Costs of Living Lower? Evidence from a Big Mac Index Approach," International Regional Science Review, , vol. 41(3), pages 364-382, May.
    7. K. Mc Morrow & W. Röger, 2002. "EU pension reform - An overview of the debate and an empirical assessment of the main policy reform options," European Economy - Economic Papers 2008 - 2015 162, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    8. Kim, Myunghyun & Song, Sang-yoon, 2022. "The effects of monetary policy on consumption: Workers vs. retirees," Journal of Macroeconomics, Elsevier, vol. 74(C).
    9. Berger, Johannes & Strohner, Ludwig, 2020. "Documentation of the PUblic Policy Model for Austria and other European countries (PUMA)," Research Papers 11, EcoAustria – Institute for Economic Research.
    10. repec:wii:ratpap:rpg: is not listed on IDEAS
    11. Yunus Aksoy & Henrique S. Basso & Ron P. Smith & Tobias Grasl, 2019. "Demographic Structure and Macroeconomic Trends," American Economic Journal: Macroeconomics, American Economic Association, vol. 11(1), pages 193-222, January.
    12. Mitze, Timo & Matz, Florian, 2015. "Public debt and growth in German federal states: What can Europe learn?," Journal of Policy Modeling, Elsevier, vol. 37(2), pages 208-228.
    13. Dominik Grafenhofer & Christian Jaag & Christian Keuschnigg & Mirela Keuschnigg, 2005. "Probabilistic Aging," University of St. Gallen Department of Economics working paper series 2005 2005-08, Department of Economics, University of St. Gallen.
    14. Sara Burcham & Wei-Wen Hsu & Sharon L. Larson & Jack Rubinstein & Susan M. Pinney, 2025. "Residential Proximity, Duration, and Health-Related Quality of Life: Insights from the Fernald Cohort," IJERPH, MDPI, vol. 22(5), pages 1-24, May.
    15. JACQUINOT Pascal & MIHOUBI Ferhat, 2010. "The Optimality of the Taylor Rule in MARCOS: Some Deterministic and Stochastic Experiments," EcoMod2003 330700073, EcoMod.
    16. Campbell, John Y. & Nosbusch, Yves, 2007. "Intergenerational risksharing and equilibrium asset prices," Journal of Monetary Economics, Elsevier, vol. 54(8), pages 2251-2268, November.
    17. Diao, Xinshen & Hazell, Peter B. R. & Resnick, Danielle & Thurlow, James, 2006. "The role of agriculture in development: implications for Sub-Saharan Africa," DSGD discussion papers 29, International Food Policy Research Institute (IFPRI).
    18. Thomas Davoine, 2018. "Population Aging and Cross-Country Redistribution in Integrated Capital Markets," EconPol Working Paper 9, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    19. Bonchi, Jacopo & Caracciolo, Giacomo, 2025. "Declining r∗ in the US: The role of Social Security," Journal of Public Economics, Elsevier, vol. 241(C).
    20. Jacopo Bonchi & Giacomo Caracciolo, 2021. "Declining natural interest rate in the US: the pension system matters," Temi di discussione (Economic working papers) 1317, Bank of Italy, Economic Research and International Relations Area.
    21. Kyriakos Emmmanouildis, 2025. "Militarization’s effects on fiscal responses to the COVID-19 pandemic: an empirical investigation through a structural equation model," SN Business & Economics, Springer, vol. 5(7), pages 1-25, July.

    More about this item

    Keywords

    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:finlet:v:81:y:2025:i:c:s1544612325007172. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/frl .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.