Debt trap or innovation motivation? the impact of public debt on corporate substantive innovation: Evidence from Chinese listed companies

Huijuan Li, Yinfei Zhao and Yong Wang

Finance Research Letters, 2024, vol. 68, issue C

Abstract: This study examines the impact of local government public debt on substantive enterprise innovation. We found that expanding public debt significantly reduces corporate substantive innovation by strengthening financing constraints and decreasing fiscal subsidies. This correlation was more significant in regions with lower levels of financial development and less significant in regions with higher levels of financial development. Moreover, the correlation was more significant in small firms with lower research and development (R&D) input but not significant in large firms with higher R&D input.

Keywords: Public debt; Substantive innovation; Financial constraint; Fiscal subsidy (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1544612324009103
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:68:y:2024:i:c:s1544612324009103

DOI: 10.1016/j.frl.2024.105880

Access Statistics for this article

Finance Research Letters is currently edited by R. Gençay

More articles in Finance Research Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().