Abstract
AbstractTo explore whether and how local government implicit debts pressure (LGIDP) affects the firm performance, this paper bases on the 2012–2018 listed enterprise data and local government financing vehicles (LGFVs) data to empirically test the impact of LGIDP on the total factor productivity (TFP) of non‐local government financing vehicles (N‐LGFVs). The results show that LGIDP significantly reduced the TFP of N‐LGFVs by transferring fiscal resources, enhancing tax collection, and transferring credit resources. But this distorting effect of LGIDP on the TFP of N‐LGFVs only exists in non‐state‐owned enterprises, small‐scale enterprises, and young enterprises. Our paper has an important policy recommendation that regulating LGFVs and alleviating LGIDP are of great significance for China to achieve sustained economic growth.
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