Official’s Turnover and Local Government Debt Issue
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| Title | Official’s Turnover and Local Government Debt Issue
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| Author | Luo Danglun and Yu Guoman |
| Organization | Sun Yat-sen University;FuDan University |
| Email | luodl@mail.sysu.edu.cn； |
| Key Words | Official Turnovers; Policy Uncertainty; Local Government Debt |
| Abstract | Recently the quasi-municipal bond is employed as a main mean of financing in local government, which causes highly concern of central government and investors. This paper investigates the official’s turnover’s influence on probability, scale, risks and costs of issuing local government debt. Through the empirical research from provinces and cities in China from 2004 to 2012, this paper indicates the political uncertainty arouse by official turnovers leads to the lower probability and smaller scale of debt issuing. We further discuss how the official’s turnover affects the issuing costs. According with anticipate, the official’s turnover increases the risks of quasi-municipal bond issuing and requests a risk premium, and this relationship appears to be more significant with higher uncertainty. Besides, the impact of official’s turnover is more pronounced when the cities are exposed to more outstanding debt. Our research enrich the understanding of local government debt. |
| Serial Number | WP744 |
| Time | 2014-10-31 |
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