The impact of local government financing vehicles debt on corporate risk-taking: Evidence from China

Fengnai Bao, Binger Chen and Di Chen

Finance Research Letters, 2024, vol. 60, issue C

Abstract: Local government financing vehicles (LGFVs) significantly influence enterprise sustainability and growth. However, the extent to which LGFVs debt affects corporate risk-taking remains unclear. Utilizing data from A-share listed companies from 2010 to 2020, this study examines LGFVs debt's influence on corporate risk-taking and the modulatory effect of land transfer income. Findings indicate that LGFVs debt generally curtails corporate risk-taking, but this effect is moderated by land transfer income. Notably, the impact of LGFVs debt on risk-taking varies across enterprises, exerting a more pronounced effect on smaller firms than on larger ones.

Keywords: Local government financing vehicles; Land transfer income; Corporate Risk-Taking (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:60:y:2024:i:c:s1544612323013132

DOI: 10.1016/j.frl.2023.104941

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