Government Subsidies And Corporate Social Responsibility

In recent years, the proportion of expenditure for government subsidies is increasing. Based on the result of analyzing of the government subsidies got by the corporations listed on the Shanghai Stock Exchange from2010to2012, we see the proportion of companies that received government subsidies is about90%. Most companies received government subsidies, but the quantities are different between different companies. Some scholars believe that government subsidies are unfair and inefficient. What kind of company is easy to get more government subsidies, how the government subsidies work and whether it is necessary for government subsidies to exist is worth discussing. So this paper aims at finding factors of government subsidies and the welfare accompany with subsidies from the perspective of social responsibility using empirical methods. The empirical results show that(1)government does not give state-owned enterprises more subsidies, but gives ST companies more grants with the motivation to help them protect their listing eligibility and the motivation is more strongly in state-owned enterprises.(2) For the implementation of the effects of government subsidies in the whole sample, we found that there is no significant correlation between government subsidies and social responsibility, but in samples of state-owned enterprises, government subsidies can promote corporate social responsibility, and increase the contribution for the relevant interest. For further research, this paper studied the impacts of subsidies included into current income and deferred on social responsibility separately taking state-owned enterprises as a sample, then found that the correlation between subsidies included into current income and social responsibility is positive significant, but not significant between subsidies included into deferred income and social responsibility. To subdivide effects of government subsidies to the enterprise stakeholders, we found that the government subsidies could increase the interests of employees, suppliers, investors and creditors, but have no significant correlation with the interests of government.(3)In further analysis, we find that government subsidies have no effect on corporate social responsibility of the next year. Generally speaking, With social responsibility to evaluate the implementation effects of government grants, government subsidies are not high efficiency, to some extent, it reflects blindness of the government on the allocation of resources. The government should strengthen the supervision on the allocation and usage of government grants, and find out the possible problems to make the subsidies play an active role in the social economic development.This paper studies the implement effect of government grants from the perspective of social responsibility, covering the interests of more stakeholders, which can make the empirical results more credible.