Structural Deleveraging: Evidence from China

Caoyuan Ma, Pin Guo and Zhao Zhang

China & World Economy, 2022, vol. 30, issue 6, 137-162

Abstract: Using province‐level data in China for the period of 1999–2015, we examine the mechanisms through which sectoral differences in leverage ratio and productivity affect macro leverage ratios. The state‐owned sector undertakes a large number of public services and plays an irreplaceable role in solving market failures and providing public goods. However, in the case of information asymmetry and incentive incompatibility, these policy burdens affect the leverage optimization and productivity improvement of the state‐owned sector. From the perspective of sectoral differences, we therefore decompose the change in macro leverage ratio into leverage ratio structure effect and productivity structure effect, and then substantiate the impact mechanisms of these two effects on macro leverage ratios. Overall, our conclusions provide theoretical support and empirical evidence for structural deleveraging in China.

Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://doi.org/10.1111/cwe.12449

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:bla:chinae:v:30:y:2022:i:6:p:137-162

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1671-2234

Access Statistics for this article

China & World Economy is currently edited by Yongding Yu

More articles in China & World Economy from Institute of World Economics and Politics, Chinese Academy of Social Sciences Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().