Research On Corporate Performance Of Financial Subsidies In China

Financial subsidies, as one of the main means of implementing active fiscal policy.It is the intervention of the government in order to make up the "market failure" and is an effective complement to the market. According to the statistical data of listed company's annual report, in 2016, China's 90% of the amount of A share listed companies received government subsidies and the amount of subsidy upped to 165 billion yuan. China is in economic transition and industrial restructuring period,the economic development from high-speed growth gradually transformed into high-speed growth. The growth rate of fiscal revenue is into the new normal. Under the conditions of the financial revenue growth slowed down,it is important how to improve the efficiency of the use of funds. Whether financial subsides make contributions to business performance, technical innovation and enterprise's kernel competitive power has aroused widespread concern of scholars.On the one hand, due to the unreasonable subsidy structure, departments which make subsidy policy are too many and lack of the necessary centralized and integrated management; some financial capital decision-making and use of funds is not transparent and the number of subsidies lack of uniform and concrete standards. During the process of selecting firms who will get the funds, government officials have autonomy.Therefore rent-seeking occurred and the existence of power-rent-seeking behaviors make the financial subsidy funds is not efficient. On the other hand, long-term and large-scale subsidies in the capital market undermine the fair competition environment,disrupt the government and market boundaries, reduce the efficiency of capital use, and generate damage to the economic development and capital market development.Using a sample of 1281 Chinese A-share listed firms for the period 2011?2014,we study the impact of financial subsidies on corporate performance and apply the theory of rent-seeking to the impact of financial subsidies on enterprise performance.The resources enterprises put into rent-seeking are waste for all the social. At the same time, this paper takes rent-seeking in the new-energy automobile industry for instance.This paper argues that fiscal subsidies have no significant effect on firm performance, because firms are either passive or active rent-seeking, which will increase the cost of enterprises. Firms having got the rent will take actions to protect rents. Rent-seeking losers will continue to invest capital and have a result of a huge non-productive costs. Corporate funds used for production is squeezed out and is not conducive to corporate R & D investment and production activities.To establish multiple regression model and research following questions: (1)Whether the financial subsidy can improve the performance of the enterprise effectively;(2) Whether the rent-seeking can help to obtain the financial subsidy. The main conclusions follow: (1) Rent-seeking does help enterprises to obtain rent; (2) Financial subsidies do not have a significant impact on corporate performance.