Local Government Debt Pressure, Financial Agglomeration, and Regional Crime

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Using panel data for Chinese prefecture-level cities from 2014 to 2024, this study examines whether local government debt pressure affects regional crime and whether financial agglomeration moderates this relationship. The results show that debt pressure significantly increases crime, while financial agglomeration weakens this effect. Mechanism tests indicate that debt pressure raises crime by absorbing financial resources and constraining data and knowledge flows. The effect is stronger in cities with lower fiscal self-sufficiency and greater population mobility. These findings reveal the social consequences of local fiscal stress and the buffering role of regional financial capacity in emerging markets.