E3S Web Conf.
Volume 235, 20212020 International Conference on New Energy Technology and Industrial Development (NETID 2020)
|Number of page(s)||7|
|Section||Research on New Energy Technology and Energy Consumption Development|
|Published online||03 February 2021|
The Crowd-Out Effect of Government Debt on Firm Leverage
Chinese Academy of Finance and Development, Central University of Fiance and Economics, Beijing, China, 100089
Based on the data of 21 provinces from 2000 to 2018, this paper empirically examines the impact of government debt on corporate financing decisions, and finds that there is a negative correlation between government debt and corporate leverage. In large enterprises, private enterprises and enterprises in economically developed areas, the negative relationship is stronger. In order to deal with the potential endogenous problems, we use the government debt excluding the province GDP as the instrumental variable, and take the financial crisis and the 4 trillion policy as the division point to divide two periods of time as the robustness test. The results show that government debt crowds out corporate debt.
© The Authors, published by EDP Sciences, 2021
This is an Open Access article distributed under the terms of the Creative Commons Attribution License 4.0, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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