TITLE:
Dynamic Mechanism Analysis of Local Public Debts Based on Financial Potential Theory
AUTHORS:
Jiarou Shi, Qinghuan Zheng
KEYWORDS:
Financial Potential, Asset Extension, Risk Joint Guarantee, Local Public Debts
JOURNAL NAME:
Modern Economy,
Vol.13 No.10,
September
30,
2022
ABSTRACT: Based on the financial potential theory, this
paper uses the fixed effect model to explore whether there is a micro-dynamic
mechanism of growth in local public debts, and
analyzes its influencing factors. The following conclusions are drawn from the
research: first, the scale of local public debts has a gradual growth trend under the effect of the “credit gravity” formed by
asset extension and risk joint guarantee. At the
same time, this “credit gravity” has spatial heterogeneity, but there is no
temporal heterogeneity. Second, in the process of exploring the factors
affecting financial potential, it is found that asset extension will directly
amplify the impact of industrial structure on the scale of local public debts, while the real effective exchange rate,
fiscal autonomy, financial explicit centralization and implicit
decentralization use financial potential as
intermediary variables to affect the scale of local public debts.