Government Subsidies And Corporate Credit Financing:

Government subsidies play an important role in transmitting national policy signals,guiding the flow of social capital,and achieving national strategic goals.In recent years,with an increasing amount of subsidy funds,the academia and practical circle both pay close attention to the effects of subsidy policy.Previous research often evaluates the micro-economic effects of subsidies from the perspective of firms' own input and output,such as R&D investment and corporate performance.However,recent studies find that government subsidies may also serve as an informative signal enhancing the firms' access to external finance(including credit finance).Through the analysis of the motivation and influencing factors of government subsidies,we find that different types or intensity of subsidies may convey different signals.Therefore,we try to use several research methods(Regression Analysis,Propensity Score Matching and Generalized Propensity Score)to explain the real relationship between government subsidies and firms'credit financing.The findings are as follows.(1)The signaling effect of R&D subsidies will enhance a firm's access to credit finance,which means R&D subsidies mainly convey positive signals about enterprises.(2)The signaling effect of non-R&D subsidies can also enhance a firm's access to short-term credit finance,but it will restrain the long-term credit financing if the subsidy intensity exceeds a certain threshold,which means there is an inverted U-shaped relationship between non-R&D subsidy intensity and firm's long-term credit financing.The restraining effect above will be stronger in non-state-owned firms.(3)As an index to reflect the utilization efficiency of government subsidies,R&D input and R&D output play a partial mediating effect between government subsidies and short-term credit financing.These findings suggest that,credit investors such as banks may have different judgments on government subsidies of different types and intensity.If the firm can efficiently use subsidies,it will also help them to obtain more credit support from banks.This paper enriches current literature of government subsidy's signaling effect,and our findings may have certain reference significance for government agencies to improve the subsidy system.