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The impact of local government debt on rural green transformation

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  • 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
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    References listed on IDEAS

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    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).

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