China government accounting supervision and corporate debt default risk

This paper takes A-share listed companies in Shanghai and Shenzhen from 2000 to 2024 as the research sample and examines the impact of government accounting supervision on corporate debt default risk and its underlying mechanisms. The results show that government accounting supervision significantly reduces firms’ default risk. Further spillover effect tests reveal that regulatory events also exert a deterrent effect on peer firms within the same industry that were not directly inspected. Mechanism analyses indicate that government accounting supervision works through two channels: mitigating both types of agency costs and improving the quality of information disclosure. In addition, heterogeneity analyses suggest that the supervisory effect is more pronounced in firms with high media attention, high industry concentration, and low ownership concentration. This study provides a new perspective on the relationship between government regulation and corporate debt risk and offers practical policy implications for enhancing corporate financial transparency and stability.