 Does local government debt promote firm green innovation? Evidence from the Chinese local government debt governance reformAnjie Li and Junjie Qiu Economic Analysis and Policy, 2024, vol. 84, issue C, 1046-1062 Abstract: Green innovation is a crucial strategy for fostering a green economy and achieving sustainable development. This paper focuses on the role of government debt in the sustainability of firm green innovation, particularly in the context of Chinese local government debt governance reform in 2014 (CLGDGR2014). By analyzing annual data of Chinese publicly listed firms from 2011 to 2018, the study explores the impact of CLGDGR2014 on firm green innovation and the underlying driving mechanisms. The findings suggest that CLGDGR2014 improves the firm green innovation, by alleviating firms' financing constraints and underscoring the productive function of local government debt in advancing new infrastructure development. The further analysis explores the impact of various types of debt on green innovation after CLGDGR2014 and indicates that explicit local government debt has a promoting effect while implicit local government debt is not obvious. In conclusion, this research offers new insights into leveraging and managing local government debt to stimulate green innovation. Keywords: Local government debt; Debt governance; Green innovation; New infrastructure (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:84:y:2024:i:c:p:1046-1062 DOI: 10.1016/j.eap.2024.10.010 Access Statistics for this article Economic Analysis and Policy is currently edited by Clevo Wilson More articles in Economic Analysis and Policy from Elsevier |
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