Local Crowding‐Out in China

Reprint No. 2020:76

Author(s): Yi Huang, Marco Pagano and Ugo PanizzaYear: 2020 Title: Journal of Finance Volume (No.): 75 (6) Pages: 2855–2898
Online article (restrictions may apply)

In China, between 2006 and 2013, local public debt crowded out the investment of private firms by tightening their funding constraints while leaving state‐owned firms' investment unaffected. We establish this result using a purpose‐built data set for Chinese local public debt. Private firms invest less in cities with more public debt, with the reduction in investment larger for firms located farther from banks in other cities or more dependent on external funding. Moreover, in cities where public debt is high, private firms' investment is more sensitive to internal cash flow.

Huang, Yi, Marco Pagano and Ugo Panizza (2020), "Local Crowding‐Out in China". Journal of Finance 75(6), 2855–2898.

Interdisciplinary European Studies

The European Union and the Return of the Nation State


This book explores the complex and ever-changing relationship between the European Union and its member states. The recent surge in tension in this relationship has been prompted by the actions of some member state governments as they question fundamental EU values and principles and refuse to implement common decisions seemingly on the basis of narrowly defined national interests.

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