Research On The Influence Of Financial Subsidy On Firm Performance

In a long period of time,financial subsidies as an important industrial policy,have played an important role in realizing industrial upgrading and promoting economic development.However,with the further development of foreign trade and market economy,the characteristics of intervention,regulation and selectivity of China's policy of financial subsidy make the effect of its implementation often deviate from the original intention of policy formulation,which leads to many distortions.Because of different stages of development,the actual effect of financial subsidy is not the same.At present,the study on whether financial subsidy is effective or not has not formed a unified or clear answer but has produced two very different views: the effectiveness and the ineffectiveness of financial subsidy.As the economy enters the stage of development of the New Normal,what kind of financial subsidy should be implemented is not only related to the improvement of the output quality and benefit of the national economy,but also to the promotion of the national industrial competitiveness.The existing researches make a detailed analysis of whether financial subsidy can promote macroeconomic development,but the impact of financial subsidy on microeconomic subjects(firms)is less comprehensive and lack of systematic analysis.So,how effective is the implementation of financial subsidy under the background of the New Normal? In particular,what is the effect of financial subsidy promoting the microeconomic subjects? Further,what is the mechanism by which financial subsidy affects the development of microeconomic subjects? How should we optimize to meet the needs of improving the innovation ability of firms under the new situation? In view of the above problems,this paper uses the “China Employer-Employee Survey”(CEES)data to comprehensively investigate the policy effect of China's financial subsidy,by analyzing the relationship between fiscal policy and firms' financial performance,productivity performance,innovation performance and the specific impact mechanism.To study and discuss the empirical evidence and policy suggestions to strengthen the impact of financial subsidy on firm performance,so as to provide some suggestions and ideas for the country's industrial development strategy under the background of the New Normal.To further explore the impact of financial subsidies on firm performance,this paper uses the first-hand “China Employer-Employee Survey”(CEES)data from three perspectives of financial performance,productivity performance and innovation performance,to explore the impact of financial subsidies,science and technology innovation subsidies on firm performance and the impact mechanism.The CEES data not only collects all kinds of performance indicators of firms,such as firm size,ownership,profit,but also contains data on subsidies such as financial subsidies and science and technology innovation subsidies.Therefore,this paper can provide complete data information for the study of impact on firm performance from the perspective of financial subsidies.Based on CEES data,this paper carries out descriptive statistics on financial subsidies and firm performance.The statistical results show that financial subsidies have obvious bias and there're great heterogeneity of financial subsidies obtained by different types of firms.Therefore,it is necessary to analyze the impact of financial subsidies on different types of firms.Through the least squares method(OLS),instrumental variable method(IV)and propensity score matching(PSM),this paper empirically concludes that financial subsidies have a significant positive impact on firms' financial performance,productivity performance and innovation performance.Meanwhile,different proxy variables are used to analyze the impact of financial subsidies on firm performance robustly.On this basis,this paper uses quantile regression,grouping regression and other methods to test the impact of financial subsidies on firm performance.The results show that the role of financial subsidies in firms with different characteristics shows obvious heterogeneity.Furthermore,this paper examines the mechanism of financial subsidies affecting firm performance.Starting from three mechanisms: financing mechanism,investment mechanism and R&D mechanism,this paper examines the impact of these three mechanisms on financial performance,productivity performance and innovation performance.Then this paper adds a sub-sample regression test in order to analyze the path of financial subsidies affecting firm performance more comprehensively and robustly.The results of intermediary effect test show that financial subsidies mainly affect firm performance by stimulating firms to increase R&D expenditure and investment.Based on the above results,this paper puts forward the following policy suggestions: Give full play to the role of the government's “visible hand” in promoting the improvement of firm performance;adopt differentiated financial subsidy policy for firms with different characteristics,thus improving the equity of financial subsidies;further strengthen the supervision and management of financial subsidy funds;establish the exit mechanism of financial subsidy policy to stimulate firms' internal R&D and investment activities.This article is divided into eight chapters,the main contents of each chapter are as follows:The first chapter is the background and significance.This paper discusses the background of this thesis in detail,introduces the present situation of relevant research at home and abroad,and preliminarily determines the theoretical and practical significance and research framework of this paper.The second chapter is the theoretical basis and research methods.This paper analyzes the theoretical basis of government intervention in enterprise development from two perspectives of fiscal policy and enterprise development,public finance and market failure.Furthermore,the impact of financial subsidies on short-term and long-term performance of firms is analyzed theoretically.The third chapter is the present situation analysis of China's financial subsidy and firm performance.On the basis of detailed introduction of collection methods and specific contents of CEES,this paper makes descriptive statistics on various indicators of financial subsidies and proxy variables of firm performance.The fourth chapter is the empirical analysis that financial subsidy affects the firms' financial performance.Based on the measurement of financial performance,this paper uses the least squares method,instrumental variable method and propensity score matching method to test whether financial subsidies can significantly improve firms' financial performance and explores the impact of financial subsidies on firms with different characteristics through quantile regression and grouping regression.The fifth chapter is the empirical analysis that financial subsidy affects the firms' productivity performance.Based on the measurement of productivity performance,this paper uses the least squares method,instrumental variable method and propensity score matching method to test whether financial subsidies can significantly improve firm' productivity performance and explores the impact of financial subsidies on firms with different characteristics through quantile regression and grouping regression.The sixth chapter is the empirical analysis of the impact of financial subsidy on the firms' innovation performance.Based on the measurement of innovation performance,this paper uses the least squares method,instrumental variable method and propensity score matching method to test whether financial subsidies can significantly improve firm' innovation performance and explores the impact of financial subsidies on firms with different characteristics through quantile regression and grouping regression.The seventh chapter is the mechanism analysis of financial subsidy influencing firm performance.By means of intermediary effect test and grouping test,this paper examines the mechanism of financial subsidy affecting financial performance,productivity performance and innovation performance of firms from three mechanisms: financing mechanism,investment mechanism and R&D mechanism.The eighth chapter is policy and suggestion.The possible innovation points of this paper are as follows: This paper multidimensional tests the impact of financial subsidies on firm performance.Based on CEES data,this paper not only empirically examines the impact of financial subsidies on financial performance,but also analyses the impact of financial subsidies on productivity performance and innovation performance,in order to comprehensively examine the impact of financial subsidies in China under the New Normal.Furthermore,this paper does empirical test of the mechanism of financial subsidies affecting firm performance more deeply.Based on the theoretical analysis of the impact mechanism,this paper examines the mechanism of financial subsidy affecting firms' financial performance,productivity performance and innovation performance,and uses the method of quantile regression to make further empirical analysis of the effect mechanism of financial subsidy.At the same time,this paper uses new micro-enterprise data to evaluate the effect of financial subsidy in China.The CEES data used in this paper not only has a strong timeliness,but also covers the relevant information of firms of different ownership and scale,which provides a more complete data information for the study of the impact of financial subsidies on firm performance.