https://macropaperwarehouse.com/authors/yuchao-peng/Yuchao PengHugo -- gohugo.ioen-ushttps://macropaperwarehouse.com/papers/the-crowding-in-effects-of-local-government-debt-in-china/https://macropaperwarehouse.com/papers/the-crowding-in-effects-of-local-government-debt-in-china/<p><strong>Research Question</strong></p> <p>This paper asks how changes in the <em>composition</em> (not the size) of Chinese local government debt influence bank risk-taking, credit allocation between privately owned enterprises (POEs) and state-owned enterprises (SOEs), and local total factor productivity. The focus is a 2015 debt-to-bond swap program in which local governments were required to convert outstanding implicit debt — primarily bank loans to local government financing vehicles (LGFVs) and LGFV-issued corporate bonds — into explicitly guaranteed local government bonds.</p>