Governmental Subsidies,corporate Innovation And Zombie Enteprises

Since the Supply-side Reform of China started in 2015,the phenomenon “Enterprises Zombification” has attracked more and more attention from the government,the public and many real and potential investors.Many scholars have done a lot of studies on the definition and dentification of “Zombie Enterprises” as well as the reasons that caused the birth and growth of these companies.It is shown that both the governmental subsidies and corporate innovation are playing a fundamental role through the development of these companies.When it comes to corporate innovation,it is both one of the reseaons that rise the problem of “Enterprises Zombification” and the factor that surfers from the governmental subsidies.As we all know,the relation among governmental subsidies,corporate innovation and “Zombie Enterprises” are so tight that we should pay attention to.In this issue,we do empirical analysis on the relationship between corporate innovation and the degree of corporate zombification through the sample,the public companies on our country's A stock market during 2010-2017 based on a fixed-effect model and a quantile regression model.And we draw conclusions that(i)It is significantly helpful for the zombie enterprises to get more financial support from the government and banks if they can get a higer level of corperate innovation;(ii)For SOEs,if the company has had achieved governmental subsidies for high-tech innovation,it will have a positive effect on the helpfulness in(i)while for non-SOEs,the effect is to the opposite;(iii)This positive effect will be more significantly when the degree of contribution on operation that governmental subsidies and bank loans have is near 50%.We do empirical analysis on the relationship among governmental subsidies,corporate innovation and the degree of corporate zombification in order to fill the vacancy in related study field and to help the decision makers understand the related policies better.