Competition for growth and local government debt risk: empirical evidence from the new list data of financing platforms

Based on the practice of local economic growth target management, this paper analyzes the impact of local economic growth targets on local financing platform debt and its internal logical mechanism. Research has shown that the increase in local economic growth target will jointly drive-up local government debt risks through direct and indirect channels that incentivize local governments to expand infrastructure investment and increase land transfer revenue. Andin areas with lower fiscal self-sufficiency, lower marketization, and larger available land area, the marginal impact of local economic growth targets on local government debt risk is greater. In addition, local financing platforms tend to use non-standard debt with less transparent management processes to finance government investment projects.