Local Protection, Competitive Strategy Selection And Subsidy Dependence Of Listed Companies

In today's A-share market,the myth of the immortal bird in the stock market,zombie enterprises and other phenomena have aroused the attention of investors on the rationality of the allocation of government financial subsidies.Then,the media and investors found that a large number of enterprises have relied heavily on subsidies.Subsidy dependence refers to a series of risks caused by enterprises' excessive dependence on financial subsidies.These risks include the aggravation of government burden,the blind expansion of low-level industries,excessive capacity of enterprises and so on.In view of this situation,it is imminent to explore the influencing factors of subsidies dependence and find a way to reduce the degree of subsidies dependence of listed companies.Based on the sample of A-share listed companies from 2009 to 2016,this paper makes an empirical study on the degree of subsidies dependence of enterprises from two aspects: the degree of local protection(external environment of enterprises)and the selection of competitive strategies(internal factors of enterprises).The study finds that the higher the degree of local protection,the lower the dependence on subsidies;compared with the lower cost strategy,the enterprises that choose differentiation strategy as their competitive strategy have lower dependence on subsidies;under the same other conditions,differentiation strategy can significantly weaken the negative correlation between local protection and subsidies dependence.Lower cost strategy will strengthen the correlation between local protection and subsidy dependence.Then,starting from the government's continuous promotion of the reform of mixed ownership to enhance the competitiveness of enterprises,this paper screens out the mixed ownership enterprises from the total sample for further research.The study finds that mixed ownership enterprises have both the advantages of state-owned capital and private capital,greatly enhance the competitiveness and environmental adaptability of enterprises,and can get rid of the influence of external environment on enterprises themselves to a certain extent,thus weakening the relationship between local protection and subsidy dependence,so that the negative correlation betweenthem is no longer significant.This conclusion,in order to solve the serious dependence of subsidies of Listed Companies in China,explores the solutions from the external environment and internal strategies: increasing local protection and choosing differentiation strategy can reduce the dependence of subsidies.However,while reducing the dependence of local enterprises on subsidies,local protection will damage the overall market interests and have a negative impact on the long-term development of local industries,and the government has issued a number of policies to eliminate local protection.It can be seen that local protection is a double-edged sword,and our government's policy direction is to eliminate local protection.Through further research,it is found that mixed ownership enterprises can get rid of the influence of external environment to a certain extent,so that the government will not increase the subsidies dependence of mixed ownership enterprises in the process of reducing and eliminating local protection.