Research on The Impact of Local Government Debt on Corporate Green Innovation
DOI:
https://doi.org/10.62051/76kj0761Keywords:
Local government debt; Green Innovation; Crowding-out effect.Abstract
The 1994 tax-sharing reform and the 2008 financial crisis triggered an expansion of local government debt in China. This not only disrupts financial market order and increases systemic financial risks but may also exert significant impacts on micro-level enterprises. Such effects include squeezing corporate credit resources, distorting resource allocation within enterprises, and ultimately affecting corporate green investments and innovation. Green innovation serves as both a key driver for economic transformation and upgrading, and a vital lever for achieving the dual carbon goals. Deepening our understanding of its influencing factors can help precisely elevate the level of green innovation development. Based on this rationale, this paper employs firm-city matching data from 2013 to 2023 to empirically examine the impact of local government debt on corporate green innovation and its underlying mechanisms.
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