Local Government Debt, Real Estate Investment and Corporate Investment: Evidence from China

Ge Gao, Jichang Dong and Xiuting Li ()
Additional contact information
Ge Gao: School of Economics and Management, University of Chinese Academy of Sciences, Beijing 100190, China
Jichang Dong: School of Economics and Management, University of Chinese Academy of Sciences, Beijing 100190, China
Xiuting Li: School of Economics and Management, University of Chinese Academy of Sciences, Beijing 100190, China

Sustainability, 2022, vol. 14, issue 19, 1-21

Abstract: This paper examines the effect of local government debt (LGD) and real estate investment on corporate investment. It finds that the increase in LGD and real estate investment leads to a decline in corporate investment and that the crowding-out effect is mitigated by the interaction of LGD and real estate investment. The effects are channeled by raising corporate costs and reducing corporate financing. This impact is more pronounced for firms in eastern regions and nonresource-based cities, large and private firms.

Keywords: local government debt (LGD); real estate investment; corporate investment; crowding-out effect; panel data model (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://www.mdpi.com/2071-1050/14/19/12353/pdf (application/pdf)
https://www.mdpi.com/2071-1050/14/19/12353/ (text/html)

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:gam:jsusta:v:14:y:2022:i:19:p:12353-:d:928027

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().