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Debt risk spillover and driving mechanism of China’s local government financing platforms

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  • Ouyang, Hongbing
  • Long, Tianqi

Abstract

This study models the daily yield data of urban investment bonds with different maturities in 30 provinces in China based on a complex network model. It analyzes provinces’ debt network characteristics and spillover effects. Moreover, this study explores the transmission path of debt network risk based on economic development level and urban development integration and analyzes the spatial correlation of the debt network. Finally, this study investigates the spillover of debt risks of different maturities across regions and their causes. The findings are of great significance for the central government to regulate the operation of local government financing platforms in various provinces, prevent regional risk contagion, and improve regional debt risk early warning mechanism.

Suggested Citation

  • Ouyang, Hongbing & Long, Tianqi, 2025. "Debt risk spillover and driving mechanism of China’s local government financing platforms," Finance Research Letters, Elsevier, vol. 81(C).
    • Handle: RePEc:eee:finlet:v:81:y:2025:i:c:s1544612325008074
    DOI: 10.1016/j.frl.2025.107548
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    Cited by:

    1. Wang, Yizi & Zhang, Jiaqi, 2025. "The reference point effect in local government debt expansion: empirical evidence from China," Finance Research Letters, Elsevier, vol. 86(PG).

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