Has Local Government Debt Promoted Economic Growth in developing countries? New evidence from a survey in China

Based on the panel smooth transition regression (PSTR) model, this paper empirically analyzes relationship between Chinese local government’s bond financing and economic growth, with quarterly data of bonds issued by governments their investment platform companies in open market from 2008 to 2018 as samples. The research shows that there is a gradual non-linear government growth China. With increase scale China, effect will gradually decline have negative effect. This result means for developing countries like it not advisable rely solely drive growth.