دانلود رایگان مقاله انگلیسی حکمرانی مالی، ظرفیت اطلاعات، و سرمایه مالی محلی - Sage 2017

Abstract

This study posits a theory that a country’s capacity to resolve information problems directly relates to the development of subnational government (SNG) capital markets. Based on a sample of fifty-two countries with various degrees of market-based approaches to public debt finance, we evaluate how the capacity to resolve information problems covaries with alternative measures of SNG debt in 2007 to 2014. Empirical findings show that transparency and depth of credit information resolution and extent of disclosure in the private sector positively relate to SNG debt levels, other institutional capacities held constant.

Discussion and Conclusions

The empirical results support the argument that a nation’s ability to resolve information problems—subject to economic, financial and market, political, and legal institutional capacity—directly relates to SNG capital market. This finding has important implications to both theory and practice. Consistent with our expectations, greater levels of information capacity indeed appear to matter for SNG debt. In particular, measures for transparency and depth of credit information and extent of disclosure drive the levels of SNG debt. Regulatory quality, while positively associated, is not statistically significant. This does not necessarily mean that regulatory quality does not matter; rather it suggests that proper regulatory quality does not harm SNG capital market activity. From a practical perspective, efforts to build better platforms for information generation and provision as well as disclosure on the firms, borrowing entities, and transactions in the system may be an essential and missing piece of institutional reforms in concert with other aspects of institutional capacity.

pects of institutional capacity. The results on the bases of fundamental institutional capacity require further discussion, however. Of the four bases, legal capacity is significant, showing that control of corruption and rule of law facilitate market activity. This finding is consistent with evidence in existing studies that, when left 20 Public Finance Review XX(X) unchecked, greater levels of corruption and substandard levels of the rule of law result in economic losses in a number of areas of capital market activity. These losses are linked to deterioration of SNG credit quality, increasing borrowing costs, and overall levels of indebtedness (Depken and LaFountain 2006; Butler, Fauver, and Mortal 2009; Moldogaziev, Liu, and Luby 2017; C. Liu, Moldogaziev, and Mikesell 2017). The positive coefficient also supports the argument that legal conditions are important for development of SNG capital markets, thus underscoring the importance of legal institutions for capital market participants.