|
|
|
| Local Public Debt and Return on Capital: Evidence from New Debt Data and the Triple Mechanism Test |
| JI Yunyang, MAO Jie, WEN Xueting
|
School of Economics and Trade, Hunan University;
School of International Business and Economics, University of International Business and Economics;
Taikang Asset Management Co., Ltd |
|
|
|
Abstract For China, preventing systemic economic risks while achieving high-quality economic development has become a general objective. Debt-financed investment by local governments is one popular tool for stabilizing economic growth and supply-side structural reform. Local government debt has been expanding on a massive scale since the 2008 financial crisis. By the end of 2019, local public debt had risen to 21.3 trillion yuan, more than double the amount in 2013. At the same time, macro returns on capital have been falling. According to the calculations of Bai Chong ’en and Zhang Qiong (2014), since 1993, China's return on capital has been on a downward trend, especially since 2008. Compared with the beginning of reform and opening up, return on capital dropped by 11.3 percentage points in 2013. To explain this, we empirically test the effect of local public debt expansion on return on capital and regional heterogeneity by using matching data on local public debt and return on capital at the prefecture-level city level, and examine the three mechanisms of the effect.
In the past decade, when promoting economic development, local governments have increasingly relied on debt-based investment and financing. The resulting huge public debt greatly loosens local governments' budget constraints, but at the same time it occupies a large amount of credit capital, which will inevitably lead to capital misallocation if investment efficiency is low or other more productive types of investment are crowded out. From the perspective of the local public debt operating process (i.e., financing - investment - repayment), in the financing stage, large-scale borrowing by local governments may crowd out the credit resources of banks, thus raising the cost of credit capital of enterprises within the jurisdiction, leading to a crowding out effect. Second, in the investment stage, local government debt funds are mainly used for infrastructure construction. If infrastructure investment has low efficiency, this also indirectly indicates the low efficiency of local government debt fund expenditure. Finally, in the repayment stage, the widespread phenomenon of using land sales to pay off debts and land financing will encourage local governments to push up house prices and develop real estate; however, when capital is excessively concentrated in real estate, this will aggravate the economic structural imbalance and capital mismatch between industries. To put it simply, local public debt has an effect on capital mismatch through the crowding out of micro-enterprise investment and financing, the efficiency of infrastructure investment, and the capital concentration of real estate, and thus affects the return on capital.
This paper makes three contributions to the literature. First, in terms of data, it uses matching data of the new calibre of public debt and return on capital at the prefecture level to conduct regression analysis, and provides more representative basic data for empirical analysis. Second, in terms of content, although the literature discusses various factors that affect China's return on capital, it does not consider the effect of China's expansion of local public debt on the influence of return on capital. This article makes up for this research gap and enriches the literature by identifying the influencing factors of return on capital. Third, in terms of mechanism, this paper takes capital mismatch as a logical starting point and comprehensively analyzes the intermediary mechanism of local public debt affecting the return on capital from three perspectives: the efficiency of infrastructure investment, the proportion of investment in real estate, and the crowding out effect of enterprise investment. It provides new evidence to understand the internal correlation between local public debt and return on capital.
The main conclusions of this paper are as follows. First, the expansion of local public debt significantly reduces the return on capital. Second, the negative impact of local public debt on return on capital is mainly realized through three mechanisms: reducing the efficiency of infrastructure investment, increasing the proportion of real estate investment, and squeezing out corporate investment. In short, the expansion of local public debt leads to a decline in the efficiency of capital allocation. Third, the negative impact of local public debt on return on capital is more obvious in non-urban agglomerations, non-large and non-medium-sized cities, and cities with greater dependence on land financing. These conclusions are of great significance for understanding China's economic growth model, and provide policy reference for deepening the reform of the investment and financing system of local governments. In the future, we should pay greater attention to the performance management and efficiency of debt funds to promote high-quality economic development.
|
|
Received: 27 September 2020
Published: 02 July 2021
|
|
|
|
|
| [1] |
白重恩和张琼,2014,《中国资本回报率及其影响因素分析》,《世界经济》第10期,第3~30页。
|
| [2] |
柏培文和许捷,2017,《中国省际资本回报率与投资过度》,《经济研究》 第10期,第37~52页。
|
| [3] |
曹婧、毛捷和薛熠,2019,《城投债为何持续增长:基于新口径的实证分析》,《财贸经济》第5期,第5~22页。
|
| [4] |
陈斌开、金箫和欧阳涤非,2015,《住房价格、资源错配与中国工业企业生产率》,《世界经济》第4期,第77~98页。
|
| [5] |
范小云、方才和何青,2017,《谁在推高企业债务融资成本——兼对政府融资的“资产组合效应”的检验》,《财贸经济》第1期,第51~65页。
|
| [6] |
方创琳和关兴良,2011,《中国城市群投入产出效率的综合测度与空间分异》,《地理学报》第8期,第1011~1022页。
|
| [7] |
郭步超和王博,2014,《政府债务与经济增长:基于资本回报率的门槛效应分析》,《世界经济》第9期,第95~118页。
|
| [8] |
洪源、陈丽和曹越,2020,《地方竞争是否阻碍了地方政府债务绩效的提升？——理论框架及空间计量研究》,《金融研究》第4期,第70~90页。
|
| [9] |
冀云阳、付文林和杨寓涵,2019,《土地融资、城市化失衡与地方债务风险》,《统计研究》第7期,第91~103页。
|
| [10] |
贾俊雪,2017,《公共基础设施投资与全要素生产率:基于异质企业家模型的理论分析》,《经济研究》第2期,第2~19页。
|
| [11] |
李成、田懋和刘生福,2014,《房地产业发展对资本回报率的影响》,《财经论丛》第12期,第38~45页。
|
| [12] |
李强和郑江淮,2012,《基础设施投资真的能促进经济增长吗？ ——基于基础设施投资“挤出效应”的实证分析》,《产业经济研究》第3期,第50~58页。
|
| [13] |
李尚蒲、郑仲晖和罗必良,2015,《资源基础、预算软约束与地方政府债务》,《当代财经》第10期,第28~38页。
|
| [14] |
廖茂林、许召元和胡翠,2018,《基础设施投资是否还能促进经济增长？——基于1994～2016年省际面板数据的实证检验》,《管理世界》第4期,第63~73页。
|
| [15] |
刘生龙和胡鞍钢,2010,《交通基础设施与经济增长:中国区域差距的视角》,《中国工业经济》第4期,第14~23页。
|
| [16] |
毛捷、刘潘和吕冰洋,2019,《地方公共债务增长的制度基础:兼顾财政和金融的视角》,《中国社会科学》第9,第45~67+205页。
|
| [17] |
毛捷和黄春元,2018,《地方债务、区域差异与经济增长——基于中国地级市数据的验证》,《金融研究》第5期,第1~19页。
|
| [18] |
邵挺,2010,《金融错配、所有制结构与资本回报率:来自 1999—2007 年我国工业企业的研究》,《金融研究》第9期,第51~68页。
|
| [19] |
孙早、杨光和李康,2015,《基础设施投资促进了经济增长吗——来自东、中、西部的经验证据》,《经济学家》第8期,第71~79页。
|
| [20] |
吴晓瑜、王敏和李力行,2014,《中国的高房价是否阻碍了创业？》,《经济研究》,第9期,第121~134页。
|
| [21] |
文雪婷和汪德华,2017,《中国宏观投资效率的变化趋势及地方政府性债务的影响——基于地级市融资平台数据的分析》,《投资研究》第1期,第4~22页。
|
| [22] |
吴智华和杨秀云,2016,《“土地财政”与中国房地产市场波动——基于两部门NK-DSGE模型的研究》,《中南财经政法大学学报》第5期,第30~41+53+158~159页。
|
| [23] |
徐军伟、毛捷和管星华,2020,《地方政府隐性债务再认识——基于融资平台公司的精准界定和金融势能的视角》,《管理世界》第9期,第37~59页。
|
| [24] |
徐长生、程琳和庄佳强,2016,《地方债务对地区经济增长的影响与机制——基于面板分位数模型的分析》,《经济学家》第5期,第77~86页。
|
| [25] |
许捷和柏培文,2017,《中国资本回报率嬗变之谜》,《中国工业经济》第7期,第43~61页。
|
| [26] |
杨志勇和张馨,2018,《公共经济学》(第四版),清华大学出版社。
|
| [27] |
余泳泽和李启航,2019,《城市房价与全要素生产率:“挤出效应”与“筛选效应”》,《财贸经济》第1期,第128~143页。
|
| [28] |
张杰、杨连星和新夫,2016,《房地产阻碍了中国创新么？ ——基于金融体系贷款期限结构的解释》,《管理世界》第5期,第64~80页。
|
| [29] |
张莉、年永威和刘京军,2018,《土地市场波动与地方债——以城投债为例》,《经济学(季刊)》第3期,第1103~1126页。
|
| [30] |
张勋和徐建国,2016,《中国资本回报率的驱动因素》,《经济学(季刊)》,第15卷第3期,第1081~1112页。
|
| [31] |
赵勇和白永秀,2012,《中国城市群功能分工测度与分析》,《中国工业经济》第 11 期,第18~30页。
|
| [32] |
郑华,2011,《预算软约束视角下地方政府过度负债偏好的制度成因分析》,《财政研究》第1期,第48~51页。
|
| [33] |
钟辉勇和陆铭,2015,《中国经济的欧洲化——统一货币区、央地关系和地方政府债务》《学术月刊》第10期,第63~71页。
|
| [34] |
Bai, C., Chang-Tai Hsieh and Y. Qian,2006.“The Return to Capital in China”,Brooking's papers on Economic Activity, 2,61~88.
|
| [35] |
Bai, C., Chang-Tai Hsieh and Z. M. Song.,2016. “The Long Shadow of a Fiscal Expansion”,NBER Working Papers.
|
| [36] |
Bleck, Alexander, and X. Liu,2017.“Credit Expansion and Credit Misallocation”,Journal of Monetary Economics, 94,1~45.
|
| [37] |
Huang, Yi, M. Pagano, and U. Panizza,2020.“Local Crowding‐Out in China”,Journal of Finance,75(6), 2855~2898.
|
| [38] |
Miao,J. and Wang,P. ,2014.“Sectoral Bubbles,Misallocation,and Endogenous Growth”,Journal of Mathematical Economics,53(08),153－163.
|
| [39] |
Richardson, S, 2006.“Over-investment of Free Cash Flow”,Review of Accounting studies,11(2-3),158~189.
|
| [40] |
Shi H, Huang S, 2014.“How much Infrastructure is too much？ A New Approach and Evidence from China”,World Development,56(2),272~286.
|
| [41] |
Song, Z.,K. Storesletten, and F. Zilibotti,2011.“Growing like China”,America Economic Review,101,202~241.
|
|
|
|
