Research on Influencing Factors of the Leverage Ratio of Non-financial Enterprises in the GBA

Abstract This paper studies the factors influencing the leverage ratio of non-financial enterprises in the Guangdong, Hong Kong and Macao Greater Bay Area (GBA) from 2007 to 2017. On the whole, the leverage ratio of non-financial enterprises in the greater bay area is not high. From the perspective of ownership, state-owned enterprises have a higher leverage ratio than non-state-owned enterprises. The leverage ratio differs significantly across industries. From the regional perspective, before 2008, enterprises in Macao had the lowest leverage ratio, and those in Guangdong had the highest. In recent years, the corporate leverage ratio has tended to be similar among the enterprises in Guangdong, Hong Kong and Macao. Corporate profitability is the most important micro-level factor affecting the leverage ratio, and economic growth has the most significant direct impact on the leverage ratio of non-state-owned enterprises. In addition, the economic growth rate, the M2 growth rate and policy uncertainty have a clear indirect impact on the leverage ratio. JEL classification numbers: G11, G24, G34. Keywords: Guangdong-Hong Kong-Macao Greater Bay Area, Leverage ratio, Influencing factors, Two-way fixed effects.