Proceedings of the 3rd International Conference on Bigdata Blockchain and Economy Management, ICBBEM 2024, March 29–31, 2024, Wuhan, China

Research Article

Research on The Influence of Industrial Policy on Corporate Debt Financing Behavior

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  • @INPROCEEDINGS{10.4108/eai.29-3-2024.2347469,
        author={Lingwen  Kong and Shuyan  He and He  Wang and Xinzhu  Zhang and Supeng  Zheng},
        title={Research on The Influence of Industrial Policy on Corporate Debt Financing Behavior},
        proceedings={Proceedings of the 3rd International Conference on Bigdata Blockchain and Economy Management, ICBBEM 2024, March 29--31, 2024, Wuhan, China},
        publisher={EAI},
        proceedings_a={ICBBEM},
        year={2024},
        month={6},
        keywords={industrial policy; corporate debt financing; central-local government system; policy coordination; financing conditions; policy discrepancies; economic development strategy; government intervention},
        doi={10.4108/eai.29-3-2024.2347469}
    }
    
  • Lingwen Kong
    Shuyan He
    He Wang
    Xinzhu Zhang
    Supeng Zheng
    Year: 2024
    Research on The Influence of Industrial Policy on Corporate Debt Financing Behavior
    ICBBEM
    EAI
    DOI: 10.4108/eai.29-3-2024.2347469
Lingwen Kong1, Shuyan He1, He Wang1, Xinzhu Zhang1, Supeng Zheng1,*
  • 1: Liaoning Normal University
*Contact email: supengzheng@missouristate.edu

Abstract

This paper explores the role of industrial policy, a key economic tool for governments to allocate social resources, in the context of China's economic transformation. This study examines the influence of industrial policy on corporate debt financing in the context of China's unique central-local government system, focusing on the period from 2001 to 2018 with data from Shanghai and Shenzhen A-share listed companies. At the same time, using similar national systems as supplementary evidence for the argument. Industrial policy, as a significant economic tool for governments to allocate resources, plays a pivotal role in economic development strategies. The study explores how these policies, especially in their variations at the central and local government levels, impact corporate debt financing. It finds that both central and local government industrial policies significantly influence corporate debt structures, with supported companies exhibiting higher total debt ratios and lower financing costs. The paper also delves into the dynamics of policy coordination and the effects of discrepancies between central and local policies on corporate financing. In instances of high policy coherence, supported companies benefit from better financing conditions. Conversely, policy discrepancies introduce uncertainties, affecting corporate financing strategies.