Government Subsidy, Marketization Degree And Enterprise Growth

The relationship between government and enterprises is always the focus of academic research. The Chinese government intervenes in the markets through government macro-adjusting fiscal policy and creates a favorable environment for enterprises through multiple government behaviors. As the most important part of public finance expenditure, financial subsidies can have effects on both economic benefit and social benefit of enterprises. Private enterprises, as the most dynamic part of social economy, have been paid more and more attention by government. Recently, local government provided more and more subsidies for private enterprises. The effects of government subsidy contemporary have been discussed and researched a lot in academic circles, some scholars concluded that government subsidy is not conducive to enterprise innovation capacity and incentive mechanism, some believed that, to a certain extent, government subsidy is in favor of the social and economic benefits for the enterprises. Due to the paucity of current research on the relationship between government subsidy and enterprise growth is insufficient, this paper consider enterprises growth as research point to study the effect of government subsidy, analyze the influence mechanism and results combined with different marketization degree.Based on related literature, asymmetric information theory, stakeholder theory, corporate value theory and rent-seeking theory which can offer some insights into the relation of government and enterprises and after theoretical analysis of relationship between government subsidy, marketization degree and enterprise growth, we put forward the research hypotheses. This paper chooses the Privately-owned Listed Companies from 2011 to 2014 as research sample, measures the enterprises growth from establishing a compositive growth evaluation model. Through building regression model and empirical analysis methods such as descriptive statistics, correlation analysis and regression analysis, the paper reaches some conclusions as follows:Firstly, looked from the overall, enterprise growth was significantly positively related to government subsidies, the increase of government subsidies promoted the enterprises growth of private listed companies. Secondly, under the low marketization degree, the positive correlation relationship between government subsidies and enterprises growth was more significant. The more government subsidies private companies receive, the greater the increase of enterprise growth. Finally, under the high marketization degree, government subsidy was negatively correlated to the growth of private enterprises, the correlation relationship between government subsidies and enterprises growth was statistically reduced.Then according to the research results which showed the relationship between government subsidy and enterprise growth,this paper has proposed several suggestions to government and private enterprises: Government should improve the subsidy mechanism, realize the standardization of subsidy management. Local governments should implement subsidy differentiation strategies according to local conditions, enable government subsidy to play its strengths and mitigate its weaknesses in different circumstances of market degree. Private enterprises should ensure legal acquisition and rational utilization of government subsidy to promote the enterprise growth.