The Empirical Study On The Government Subsidy Of Listed Companies With Small Profits

In domestic securities market,meager-profit-making listed companies have become a unique landscape.These companies operate slightly better than loss-making companies,with a character of low profit but no loss.However,the authenticity of these companies' profits are often questioned by the public.Are they a true tiny-benefit business or achieving low benefit by other means?Self-control Power of Local government in economic growth is enhancing,and The company in stock market is a kind of rare resource.Local government has vital significance in distorting loss.This article makes a systematic study of governmental subsidy for meager-profit-making listed companies between 2004 and 2006 and its characters.It contains two parts;firstly,it makes a comparison of amounts and contribution rates of governmental subsidy for meager-profit-making companies before,during and after their meager profit period,and to see if the governmental subsidy has a significant effect in gaining profits through empirical analysis. Secondly,it analyzes if the governmental subsidy leads to an annual increasing profitability. Analyses show,during meager-profit period,the subsidy amount is bigger and contribution rate is higher than before and after it,meanwhile,the subsidy has significance in gaining more profit while no afterwards.Based on existed research accomplishment and to make up for its inadequacies,this article states measures and characters of governmental subsidy for meager-profit-making listed companies,in a more systematic and detailed way.Meanwhile,the article proposes security regulators and law makers to make reasonable and effective regulations to build a sound securities market.