This study examines the impact of local government debt on stock price crash risk. The results show that corporations located in regions with higher levels of local government debt are more likely to have lower future stock price crash risk. This study further finds that a higher intensity of local government debt may crowd out firm-level credit and ultimately improve the quality of corporate information disclosure, which explains the mitigation effect of local government debt. Moreover, the above mitigation effect is more salient when firms are located in regions with a low level of marketization and when firms’ financial constraints are high.

中文翻译：

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地方政府债务的意外后果：来自股价崩盘风险的证据

本研究考察了地方政府债务对股价崩盘风险的影响。结果表明，位于地方政府债务水平较高地区的公司更有可能具有较低的未来股价崩盘风险。本研究进一步发现，较高的地方政府债务强度可能会挤出企业层面的信用，最终提高企业信息披露的质量，这解释了地方政府债务的缓和效应。此外，当企业位于市场化程度较低的地区和企业的财务约束较高时，上述缓解效果更为显着。