This study examines how local government financing affects privately operated sports institutions in China. Using 4,491 city-year observations from prefecture-level cities during 2010–2024, we find that greater government financing significantly promotes their development. The result remains robust to alternative measures, propensity score matching, lagged specifications, and instrumental-variable estimation. Mechanism tests indicate that government financing operates by expanding public sports facility supply and strengthening sports consumption market potential. The effect is more pronounced in non-eastern and non-core cities. These findings highlight the role of local fiscal-financial capacity in supporting private sports service development.
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Tang et al. (2026) studied this question.
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