IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v14y2022i3p1474-d735787.html
   My bibliography  Save this article

Impact of China’s Provincial Government Debt on Economic Growth and Sustainable Development

Author

Listed:
  • Wanping Yang

    (School of Economics and Finance, Xi’an Jiaotong University, Xi’an 710049, China)

  • Zhenya Zhang

    (School of Economics and Finance, Xi’an Jiaotong University, Xi’an 710049, China)

  • Yajuan Wang

    (School of Management, FuDan University, Shanghai 200433, China)

  • Peidong Deng

    (School of Economics and Finance, Xi’an Jiaotong University, Xi’an 710049, China)

  • Luyao Guo

    (School of Economics and Finance, Xi’an Jiaotong University, Xi’an 710049, China)

Abstract

Macroeconomic stability is the core concept of sustainable development. However, the coronavirus disease (COVID-19) pandemic has caused government debt problems worldwide. In this context, it is of practical significance to study the impact of government debt on economic growth and fluctuations. Based on panel data of 30 provinces in China from 2012 to 2019, we used the Mann–Kendall method and Kernel Density estimation to analyze the temporal and spatial evolution of China’s provincial government debt ratio and adopted a panel model and HP filtering method to study the impact of provincial government debt on economic growth and fluctuation. Our findings indicate that, during the sample period, China’s provincial government debt promoted economic growth and the regression coefficient (0.024) was significant. From different regional perspectives, the promotion effect of the central region (0.027) is higher than that of the eastern (0.020) and western regions (0.023). There is a nonlinear relationship between China’s provincial government debt and economic growth, showing an inverted “U-shaped” curve. Fluctuations in government debt aggravate economic volatility, with a coefficient of 0.009; tax burden fluctuation and population growth rate aggravate economic changes. In contrast, the optimization of the province’s industrial structure and the improvement of the opening level of provinces slow down economic fluctuations.

Suggested Citation

  • Wanping Yang & Zhenya Zhang & Yajuan Wang & Peidong Deng & Luyao Guo, 2022. "Impact of China’s Provincial Government Debt on Economic Growth and Sustainable Development," Sustainability, MDPI, vol. 14(3), pages 1-21, January.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:3:p:1474-:d:735787
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/14/3/1474/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/14/3/1474/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Xindong Wei & Ning Wang & Pingping Luo & Jie Yang & Jian Zhang & Kangli Lin, 2021. "Spatiotemporal Assessment of Land Marketization and Its Driving Forces for Sustainable Urban–Rural Development in Shaanxi Province in China," Sustainability, MDPI, vol. 13(14), pages 1-20, July.
    2. Agnieszka Kozera & Aldona Standar & Łukasz Satoła, 2020. "Managing Rural Areas in the Context of the Growing Debt of Polish Local Government Units," Agriculture, MDPI, vol. 10(9), pages 1-25, August.
    3. Vadim Elenev & Tim Landvoigt & Patrick J. Shultz & Stijn Van Nieuwerburgh, 2021. "Can Monetary Policy Create Fiscal Capacity?," NBER Working Papers 29129, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Busato, Francesco & Varlese, Monica & Ulloa Severino, Claudia, 2022. "Public debt heterogeneity at country level: an empirical analysis," MPRA Paper 113812, University Library of Munich, Germany.
    2. Yuanlin Wu & Cunzhi Tian & Guannan Wang, 2023. "Local Government Debt and Corporate Investment Behavior in China: Real versus Financial Investment," Sustainability, MDPI, vol. 15(22), pages 1-22, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Juan Xu & Mengsheng Yang & Ziliang Lu & Dan Liu & Yan Wu, 2021. "Quality Analysis on Spatial Planning Pattern of Rural Area in Southern Shaanxi, China," Sustainability, MDPI, vol. 13(22), pages 1-22, November.
    2. Zhengyang Jiang & Hanno Lustig & Stijn Van Nieuwerburgh & Mindy Z. Xiaolan, 2024. "The U.S. Public Debt Valuation Puzzle," Econometrica, Econometric Society, vol. 92(4), pages 1309-1347, July.
    3. Ren, Shoujia & Guo, Bin & Wang, Zhijun & Wang, Juan & Fang, Quanxiao & Wang, Jianlin, 2022. "Optimized spectral index models for accurately retrieving soil moisture (SM) of winter wheat under water stress," Agricultural Water Management, Elsevier, vol. 261(C).
    4. Diamond, William & Jiang, Zhengyang & Ma, Yiming, 2024. "The reserve supply channel of unconventional monetary policy," Journal of Financial Economics, Elsevier, vol. 159(C).
    5. Lili Liu & Meng Chen & Pingping Luo & Maochuan Hu & Weili Duan & Ahmed Elbeltagi, 2023. "A Novel Integrated Spatiotemporal-Variable Model of Landscape Changes in Traditional Villages in the Jinshaan Gorge, Yellow River Basin," Land, MDPI, vol. 12(9), pages 1-28, August.
    6. Yang Wang & Remina Shataer & Tingting Xia & Xueer Chang & Hui Zhen & Zhi Li, 2021. "Evaluation on the Change Characteristics of Ecosystem Service Function in the Northern Xinjiang Based on Land Use Change," Sustainability, MDPI, vol. 13(17), pages 1-17, August.
    7. Nissinen, Juuso & Sihvonen, Markus, 2024. "Bond convenience curves and funding costs," Journal of International Economics, Elsevier, vol. 151(C).
    8. Shengyun Wang & Liancheng Duan & Qin Zhu & Yaxin Zhang, 2022. "Spatial Differences of Ecological Well-Being Performance in the Poyang Lake Area at the Local Level," IJERPH, MDPI, vol. 19(18), pages 1-19, September.
    9. JungHoon Kim & Byungsun Yang, 2021. "A Smart City Service Business Model: Focusing on Transportation Services," Sustainability, MDPI, vol. 13(19), pages 1-14, September.
    10. Wei He & Wanqiang Li & Peidong Deng, 2022. "Legal Governance in the Smart Cities of China: Functions, Problems, and Solutions," Sustainability, MDPI, vol. 14(15), pages 1-24, August.
    11. Agnieszka Kozera & Aldona Standar & Joanna Stanisławska & Anna Rosa, 2024. "Low-Carbon Rural Areas: How Are Polish Municipalities Financing the Green Future?," Energies, MDPI, vol. 17(21), pages 1-33, October.
    12. Alexandre Corhay & Thilo Kind & Howard Kung & Gonzalo Morales, 2021. "Discount Rates, Debt Maturity, and the Fiscal Theory," Staff Working Papers 21-58, Bank of Canada.
    13. Malmierca, María, 2022. "Stabilization and the policy mix in a monetary union," The Quarterly Review of Economics and Finance, Elsevier, vol. 83(C), pages 92-118.
    14. Yuanyue Wang & Zhaohui Yu & Xiaojing Yi, 2022. "Financing liabilities and inefficient investment of listed companies: Based on the adjustment effect of different financial structures," Australian Economic Papers, Wiley Blackwell, vol. 61(4), pages 848-875, December.
    15. Shuping Fan & Peng Li & Qi He & Jiaru Cheng & Mingfeng Zhang & Nan Wu & Song Yang & Shidong Pan, 2022. "Study on the Spatial-Temporal Evolution of Land Use Ecosystem Service Value and Its Zoning Management and Control in the Typical Alpine Valley Area of Southeast Tibet—Empirical Analysis Based on Panel," Sustainability, MDPI, vol. 14(16), pages 1-19, August.
    16. Renata Matysik-Pejas & Małgorzata Bogusz & Kamila Daniek & Monika Szafrańska & Łukasz Satoła & Andrzej Krasnodębski & Paweł Dziekański, 2023. "An Assessment of the Spatial Diversification of Agriculture in the Conditions of the Circular Economy in European Union Countries," Agriculture, MDPI, vol. 13(12), pages 1-22, December.
    17. Sroka, Wojciech & Bojarszczuk, Jolanta & Satoła, Łukasz & Szczepańska, Barbara & Sulewski, Piotr & Lisek, Sławomir & Luty, Lidia & Zioło, Monika, 2021. "Understanding residents’ acceptance of professional urban and peri-urban farming: A socio-economic study in Polish metropolitan areas," Land Use Policy, Elsevier, vol. 109(C).
    18. Marcin Bogdański & Marcin Janusz, 2022. "Small Towns’ Functions as a Determinant of the Standard of Living in Rural Areas—An Example from Poland," Sustainability, MDPI, vol. 14(20), pages 1-21, October.
    19. George‐Marios Angeletos & Chen Lian & Christian K. Wolf, 2024. "Can Deficits Finance Themselves?," Econometrica, Econometric Society, vol. 92(5), pages 1351-1390, September.
    20. Xin Yan & Yuejian Wang & Guang Yang & Na Liao & Fadong Li, 2021. "Research on the Scale of Agricultural Land Moderate Management and Countermeasures Based on Farm Household Analysis," Sustainability, MDPI, vol. 13(19), pages 1-13, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:14:y:2022:i:3:p:1474-:d:735787. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.