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Does the expansion of local government debt affect the export quality?

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  • Xuan Leng
  • Pengcheng Li
  • Yuming Zheng

Abstract

Improving the quality of its exports is an important way for China to develop high‐quality foreign trade. It is of greatest academic value and policy significance to study the factors that restrict the export quality of enterprises. This paper empirically discusses the impact of local government debt expansion on export quality as well as its transmission mechanism, using microdata from Chinese enterprises. According to research findings, the acquisition of debt negatively affects enterprises in several ways. First, the expansion of local government debt has a negative impact on the export quality of enterprises. Second, local government debt affects export quality through financial constraints and the Dutch disease effect. Third, local government debt impact on export quality reflects significant heterogeneity in terms of debt types and characteristics of regional economics.

Suggested Citation

  • Xuan Leng & Pengcheng Li & Yuming Zheng, 2023. "Does the expansion of local government debt affect the export quality?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(4), pages 2495-2515, June.
    • Handle: RePEc:wly:mgtdec:v:44:y:2023:i:4:p:2495-2515
    DOI: 10.1002/mde.3830
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    Cited by:

    1. Li, Pengcheng & Qin, Yilun, 2024. "The impact of local government debt expansion on exports: A study based on Chinese enterprise-level data," International Review of Economics & Finance, Elsevier, vol. 93(PB), pages 299-315.
    2. Xiong, Jiacai & Huang, Ling & Yang, Zelin & Wang, Xin, 2024. "The impact of local government debt on entrepreneurship: Evidence from a quasi-natural experiment of local debt governance reform," International Review of Economics & Finance, Elsevier, vol. 93(PA), pages 501-519.

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