Fiscal decentralization, local government debt, and corporate innovation

Sen Li and Tiancheng Qi

Finance Research Letters, 2023, vol. 54, issue C

Abstract: Based on the panel data of Chinese non-financial listed companies, this paper empirically examines the impact of fiscal decentralization on corporate innovation activities and analyzes the moderating role of local government debt in the relationship between fiscal decentralization and corporate innovation. The study finds that fiscal decentralization has a facilitating effect on corporate innovation activities, but the accompanying increase in the level of local government debt will intensify corporate financing constraints, thus having a certain crowding-out effect on corporate innovation activities. This study not only provides guidance on corporate governance, but also provides a reference for institutional reform related to fiscal decentralization and local government debt

Keywords: Fiscal decentralization; Local government debt; Corporate innovation; Moderating effect (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:54:y:2023:i:c:s154461232300137x

DOI: 10.1016/j.frl.2023.103764

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