Does financial deleveraging affect governments’ desirability of privatization? Evidence from the Chinese listed local SOEs

Weiwei Yang, He Wang and Huobao Xie

Journal of Applied Economics, 2023, vol. 26, issue 1, 2220468

Abstract: The rapid growth of local SOEs in China largely depends on high leverage, thus local governments and their SOEs will face harder budget constraints when the central bank implements tight credit policies. Using a sample of listed local SOEs in the Chinese A-share market, this paper attempts to investigate the relationship between financial deleveraging and privatization of local SOEs. We find that privatization of the Chinese local SOEs increases significantly during financial deleveraging, and this effect is more pronounced among SOEs with less tax contribution, fewer employees and that cause greater financial burden to the local governments. This paper broadens the research on environmental factors that drive politicians to privatize.

Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/15140326.2023.2220468 (text/html)
Access to full text is restricted to subscribers.

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:taf:recsxx:v:26:y:2023:i:1:p:2220468

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/recs20

DOI: 10.1080/15140326.2023.2220468

Access Statistics for this article

Journal of Applied Economics is currently edited by Jorge M. Streb

More articles in Journal of Applied Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().