Abstract: Promoting the healthy and sustainable development of local government debt is a crucial strategy for preventing and resolving systemic financial risks. Using the local government debt management system reform initiated in 2015 as a quasi-natural experiment, this paper conducts a study from the entrepreneurial perspective by employing the panel data of prefecture-level cities and a multi-time point difference-in-differences model. The findings reveal that: firstly, the reform has significantly enhanced regional entrepreneurial activity, which is conducive to stimulating entrepreneurship. Secondly, the mechanism test results indicate that the reform can not only alleviate credit constraints in entrepreneurial activities but also improve government-business relationships, thereby promoting regional entrepreneurial activity and fostering entrepreneurship through these two channels. Thirdly, the entrepreneurial promotion effect generated by the reform exhibits heterogeneity in terms of ownership and industry sectors, being more pronounced in private enterprises, the service industry, and high-tech sectors. Fourthly, the reform produces a stronger entrepreneurial promotion effect in cities with higher information disclosure levels, lower fiscal pressure, and superior legal and business credit environments. Based on these findings, local governments could consider leveraging the opportunity of local debt governance to improve government-business relationships and alleviate financing difficulties faced by market entities, thereby fully stimulating market entrepreneurial vitality. However, it is necessary to implement differentiated reform promotion strategies based on actual conditions, such as local fiscal pressure, while accelerating the establishment of public information service platforms and the construction of a social credit system.

Key words: local debt management system reform, credit constraints, government-business relations, entrepreneurial activity, entrepreneurial spirit