The Impact Of Government Subsidy On Business Performance

With the continuous development of globalization,Chinese economic marketization continues to deepen,although it is not a planned economy era,but the government's support for the enterprise is still ubiquitous.Government "hand" to help enterprises,participate in the enterprise management,the most direct means is the government subsidies.Because government provide such assistance to enterprises is free,it is easily leading that the enterprise generate a strong dependence.When the enterprise depends on the government subsidies,the enterprise performance can be effectively improved,whether the enterprise can also be healthy development by itself,whether the government subsidies can play its due effect,or play a role in regulating the economy and supporting the enterprise.It is worthy to study.This paper first elaborated the research background,purpose and research ideas and innovation,combing the relevant literature.Then,it clarifies the definition and subsidy methods of government subsidy,and analyzes the four factors that affect the government subsidy:industrial policy,enterprise characteristics,shareholding losses and local government performance.Based on the theory of externalities,stakeholder and soft budget constraint,this paper analyzes the case enterprise Nanning Sugar Industry Co.,Ltd.In this paper,the study found that for industrial policy and stable employment,regional economic development and prevent from ST,Nanning Sugar Industry Co.,Ltd receive government subsidies for many years.Nanning Sugar Industry Co.,Ltd received government subsidies,this government subsidies have obviously promoted effect on short-term performance,government subsidies even can help the enterprise to profit in some years.But the government subsidies can not have obviously promoted effect on long-term performance.Due to the instability of government subsidies,non-durable,the enterprise long-term performance is fluctuating.This paper has further analysis the relationship between government subsidies and earnings management.The study found that the government subsidies support the enterprise profit year performance,tax return part may adjust the earnings management.At the end of the paper,it put forward some proposals from the government and the enterprise:for the government,the government should track on government subsidies'evaluation,to maximize government subsidies effect;strengthen the government subsidies for information disclosure,improve the transparency of government subsidies;To establish supervision department,strengthen the audit of government subsidies.For the enterprise,the enterprise should not always depend on government subsidies,first the enterprise should give specification to use government subsidies;Second the enterprise must carry on the risk management,improve its ability to resist risks;finally the enterprise should make the government subsidy funds for innovation,cultivate the competitiveness of the enterprises.