Correlation Study Between Financial Support And Corporate Performance

As a leading engine of technological development, the high-tech enterprises support and accelerate the transformation of China’s economic development model. Since the high-tech enterprises are mainly in technology development and in the transformation of technological achievements, Most of the funds need to be invested to R&D activities which have long pay-off periods and large potential risks. So China issued a series of preferential policies to promote the development of high-tech enterprises and accelerate progress in china’s science and technology. The government worked out a series of favorable policies to support and propel the development of the development of high tech enterprises, including financial subsidies and preferential tax policy such as beneficial tariff and tax cuts. Taking the information technology industry as an example, TIANMA and other companies received government subsidies of about 5.5 billion yuan in 2013, an increase of 19 %. However, it didn’t achieve the expected benefits of the policy by the support of the states to high-tech enterprises. Optoelectronic three which facing further overcapacity situation had achieved huge financial subsidies. There would be an important issue is that whether financial subsidies and tax incentives can really promote enterprise development? Whether it can be implemented to improve the business performance of the track?To explore the direction and intensity of fiscal policy influence the performance of high-tech enterprises, first of all making the performance comprehensive and accurate. Combine with the characteristics of high-tech enterprises, performance is defined as three aspects which are operating performance, technical performance and social performance with the method of factor analysis. After determining the high-tech enterprise performance metrics, I introduced external theory, agency theory and stakeholder theory, then analyzed the pros and cons as well as the necessity of the existence of government subsidies may lead to inefficiencies and then make assumptions.In order to analyze the effect of financial subsidies and tax incentives to enterprise performance, the paper used multiple linear regression models to examine with the data of 104 companies which listed in IT industry, electronic industry and the biopharmaceutical industry. Research has analyzed the tax incentives can significantly improve the performance of high-tech enterprises, especially in the financial performance and technical performance. There is no correlation between subsidies and corporate performance, only financial subsidies have significant effect on social performance. This article draws the conclusion that financial subsidies and tax incentives for high-tech enterprises achieved a certain degree of effect, but there are still some problems.For empirical results, we propose the following recommendations: 1. Take the tax concessions as the dominant direction of fiscal policy. 2. To strengthen the management of subsidies granted funds. 3. Establish and improve the evaluation system of subsidies as well as open and transparent regulatory mechanism.