Local government debt is not only an important factor to maintain regional economic stability and development, but also a potential macro factor that affects the economic behavior of micro-enterprises. Under the background of fiscal decentralization in China, this paper examines the impact of local government debt on corporate risk taking by a sample of Chinese a-share listed companies from 2010 to 2018. The study found that the expansion of local government debt significantly reduced the risk-taking of enterprises, but the impact was not significant in state-owned enterprises. The empirical findings of this paper enrich the theoretical research results of local government debt on corporate economic behavior, and provide theoretical support and decision-making reference for the government to improve local government debt supervision policies and micro-enterprises to optimize internal organizational structure.