The pressure of economic growth and the issuance of Urban Investment Bonds: Based on panel data from 2005 to 2011 in China

Haijun Wu, Jidong Yang and Qijing Yang

Journal of Asian Economics, 2021, vol. 76, issue C

Abstract: This paper explores the motivations behind the issuance of Urban Investment Bonds (UIBs) to stimulate local economies in China after the 2008 global financial crisis. Based on panel data from 2005 to 2011, we find that pressure to achieve economic growth has a positive effect on the issuance of UIBs, while fiscal pressure has the opposite effect on UIB issuance. We also find that the tenure of municipal party secretary, the revenue of land-use right transfer and fiscal pressure will change the impact of economic growth pressure on UIB issuance. These results are consistent with a pattern in which China's local government officials are influenced by the central government's assessment of local economic growth performance and have promotion-related incentives to maintain and develop the local economy.

Keywords: Stimulus package; Economic growth pressure; Official promotion; Urban Investment Bonds; China (search for similar items in EconPapers)
JEL-codes: C1 H63 H74 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:asieco:v:76:y:2021:i:c:s1049007821000701

DOI: 10.1016/j.asieco.2021.101341

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