Market-oriented Transformation of Local Government Financial Vehicles and Debt Replacement:A View of Shareholding in Listed Firms
Establishing a government debt management mechanism compatible with high-quality development,improving a comprehensive local debt monitoring and regulatory system,and promoting the transformation of local government financial vehicles(LGFVs)in a categorized manner are among the overall requirements proposed in the 2024 Government Work Report by the State Council.At present,more and more LGFVs are beginning to carry out market-oriented transformations by holding shares of listed companies.At the same time,it is becoming increasingly common for LGFVs to relieve their debt repayment pressure through active bond swaps.Therefore,can the market-oriented transformation of LGFVs increase the scale of their active bond swaps?Can the market-oriented transformation after bond swaps help LGFVs effectively avoid debt risks?There is no in-depth study on this in existing literature.This paper constructs a measurement index of LGFVs holding shares in listed companies.Based on the data on municipal investment bonds issued by LGFVs from 2007 to 2021,this paper discusses the influence of LGFVs holding shares in listed companies on their debt replacement.It is found that the scale of active bond swaps is significantly increased after LGFVs hold shares in listed companies,and this conclusion remains valid after a series of robustness tests.The mechanism test shows that LGFVs holding shares in listed companies mainly promote active bond swaps by reducing the financing cost of urban investment bonds and improving corporate governance.Heterogeneity analysis shows that in LGFVs with low administrative levels,large maturity debt,high mismatch of investment and financing terms,rich market experience of the executives,and areas with more infrastructure investment,LGFVs holding shares in listed companies promote the scale of bond swaps more obviously.Furthermore,this paper finds that LGFVs holding shares in listed companies can effectively avoid the problem that active bond swap behavior aggravates the default risk.Based on the actual needs of China to prevent and resolve local hidden debt risks,this paper discusses the impact of LGFVs holding shares in listed companies on the active bond swap,which not only enriches the research perspective of the economic effects of the market-oriented transformation of LGFVs and influencing factors of debt replacement but also deepens relevant research on the classified reform of state-owned enterprises to a certain extent.Relevant conclusions provide useful references for LGFVs to resolve debt repayment pressure and achieve sustainable development,and for local governments to prevent and resolve hidden debt risks from the"source".
local government financial vehicles(LGFVs)market-oriented transformationdebt replacementholding listed companies
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万方数据
