Yong-Lin Wang

China’s Local Debt Reform for Fiscal Sustainability: Cost Reduction Effect and Allocative Boundary

State Council Document No. 43 and the revised Budget Law legally disclaimed Chinese local governments’ responsibility for the debts of the enterprises they own. Across 22,233 firm-year observations on 1686 listed firms from 2009 to 2023, the effective cost of debt of local state-owned firms fell by 0.33 percentage poin...