Abstract: There is significant regional heterogeneity in the impacts of local governmental debts (LGDs) on economic growth paths. A study on this heterogeneity is helpful for enhancing the effectiveness of LGDs governance. The public investment, private investment and public spending are the three main paths for LDGs militating on the economic growth. Based on the assumption that the debt impacts on these three paths are non-linear and possibly heterogeneous, this paper selects relevant data from 30 provinces in the years of 2010 to 2016, and does an empirical study on three paths affecting the economic growth in the nation, as well as in the eastern, middle and western parts of the country. It is found that the increase of LGDs in the eastern region has no significant impact on public investment, but an inverted U-shaped militation against private investment (the turning point is at about 19%) and a significant negative role on public spending. In the central region, the expansion of LGDs exerts an inverted U-shaped impact on both public investment and private investment (the respective turning points are at about 30% and 28%), and has a significant negative impact on public spending. The augmentation of LGDs has an inverted U-shaped impact on all public investment, private investment and public spending (all the turning points are at over 70%).

Key words: Local Governmental Debt, Economic Growth Path, Regional Heterogeneity