Local Government Debt Governance and Enterprises'Labor Income Share Enhancement:A Quasi-Natural Experiment Based on the Implementation of the New Budget Law
This paper tests the impact of local government debt governance on labor income share using data from A-share listed companies in Shanghai and Shenzhen from 2009 to 2021 as a sample and the implementation of the new Budget Law as a quasi-natural experiment.The double-difference estimation shows that local government debt governance significantly in-creases the labor income share of enterprises,confirming that the reform of the local government debt management system helps to optimize the pattern of primary distribution.The above results remain robust after considering the endogeneity prob-lem as well as conducting a series of robustness tests.Mechanism analysis shows that local government debt governance eases corporate financing constraints,which in turn raises corporate labor income shares through factor composition effects and hu-man capital upgrading effects.Heterogeneity analysis finds that the above effects are more prominent in non-state-owned en-terprises and labor-intensive industries.Further research finds that local government debt governance significantly reduces the pay gap within enterprises,and the labor income share of ordinary employees increases while the labor income share of ex-ecutives does not change significantly.This paper extends the economic consequences of local government debt governance to the field of enterprise factor income distribution,emphasizing that local government debt governance is not only conducive to alleviating the difficulties of enterprise financing,optimizing factor inputs and promoting the upgrading of enterprise human capital,but also lays the foundation and provides the basis for decision-making to improve the distribution of primary income,increase the income of the residents to expand consumption,and realize the common wealth.
Governance of Local Government DebtShare of Enterprise Labor IncomeImplementation of the New Budget LawCredit ConstraintsCommon Prosperity
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