Research On Government Grants Allocation Efficiency And Effectiveness Of Internal Control In Listed Company

With the market economy in China moving fast, enterprises tightly catch the greatest opportunity to improve its comprehensive strength. As the trend of economic globalization being unstoppable, the development of emerging industry plays a significant role in improvement of comprehensive nation strength. China keeps encouraging the development of emerging industries and hopes them to instill energy to the market. In order to achieve some political aims, local government supports these industries in the way of subsidiary. However, as the use of government subsidiary is diversity, the problem has got a lot attention these days. The allocation efficiency of government subsidiary means that enterprises decide the different use of the subsidiary according to the purposes. The good use of it can take a rise in the corporate performance. In practice, some problems can decrease the allocation efficiency of government subsidiary which is negative to the enterprise. As a result, how to improve the allocation efficiency of government subsidiary is a hard question to corporations. Besides, it is also a hot spot in academic research.While the most research recently mainly focus on outside environment, such as financing restriction, which seldom has any result in internal control efficiency. The analysis of the relationship between internal control efficiency and government subsidiary allocation efficiency can provide a new way to solve the problem of enterprises in China nowadays. Since the publication of Enterprise Internal Control Standards, enterprises in China have built internal control system which is good at safeguarding the assets, improving the efficiency of performance and ensuring the reality of financial statements. Besides, internal control is also a good tool to solve the problem in property rights, information asymmetry and so on. So, the author holds the idea that internal control efficiency has a positive influence in the allocation efficiency of government subsidiary.Firstly, this study makes a detail analysis to the current situation of the allocation efficiency of government subsidiary in order to explain the features of it in our country. Next, based on the content of internal control, this study inspects the relationship between internal control efficiency and the allocation efficiency of government subsidiary. And it can help us to get more knowledge about these two concepts. Besides, this study can provide a new way for managers in corporations to construct internal control.The study is divided into six chapters. Chapter One is the introductory of the paper, and Chapter Two is the literature review, introduces the research results of internal control and the allocation efficiency of government subsidiary. The third chapter analyzes the theory of the two. From the Chapter Four to Chapter Five, the study makes an empirical study to analyze the relationship between internal control efficiency and the allocation efficiency of government subsidiary. Chapter Six presented the conclusions and recommendations of the whole article.Our main contribution can be described as following:1. Creation in research method:the paper combines the government subsidies allocation efficiency and effectiveness of internal control, on the one hand, the impact from effectiveness of internal control on government grant are considered, on the other hand emphasizes the increasing role played by internal control in the process of China’s economic development, provides a fresh idea for how to improve the allocation efficiency of government grant.2. Creation in research perspective:this paper does not hold a single theoretical perspective, but selects a representative listed company with specific circumstances, studies the government subsidies allocation efficiency creatively, this research have much theoretical and practical value. In this paper, firstly, we analyze the relationship between government grants allocation efficiency and the effectiveness of internal control theoretically by standard research method, and further we examine the change of the relationship by the effect of different nature of property rights, connections with the government and regions; secondly, this paper adopts empirical method, takes Shanghai A-Share listed company on the main board for research object, constructs model to examine the effect to effectiveness of internal control from government grants allocation efficiency, the group tests under the results of different factors are given in this paper to avoid the one-sidedness of the conclusion by single method.