Natural Disasters,Government Subsidies And Firm Investment

In recent years,natural disasters have occurred frequently due to global warming and other reasons.Although the process of natural disasters is short-lived,it has had a huge impact on macro-economy and micro-enterprises,causing economic losses,casualties and so on.The economic consequence of natural disasters have always been a hot and difficult issue that has attracted widespread attention from all walks of life.However,existing researches mainly focus on the macro level of disasters' impact,and the impact of disasters on the micro-economy lacks due attention.As a micro-main body of macro-economy,the impact of meteorological disasters may affect the production and operation of enterprises,which in turn affects performance.China belongs to the subtropical monsoon climate,with a long coastline and therefore the southeast coastal area has become a typhoon-prone area.In the past ten years,the typhoon records in China's coastal areas have been continuously refreshed,which has brought huge impacts to the lives of the surrounding residents.It has also brought huge economic losses to the enterprises and damage to machinery equipment,and affected states of business.So is it just unfortunate that disasters bring to the enterprise? Will the company choose to purchase new equipment and factories to deal with disasters? And can disasters affect the investment and investment efficiency of the enterprises on the other hand?This paper takes typhoon "KaiKui" as a disaster event,selects the most severely affected area,Zhejiang Province,as research area,and uses all A-share listed companies in Zhejiang Province as sample data to study the influence of disaster impact on the investment and investment efficiency of enterprises,and then examine whether government subsidies play a regulatory role in such conditions.The following conclusions are drawn:The pre-disaster period is considered as control group.During the disaster period and the pro-disaster period,the investment stock,investment increment and investment efficiency of the enterprises were significantly and positively correlated with the disaster impact.This shows that with the typhoon transited,the investment and investment efficiency of enterprises have been improved.Although the adjustment effect of government subsidies has not passed the significant test,combined with the correlation analysis and coefficient observation,the government subsidies have improved the investment and investment efficiency of affected enterprises to a certain extent.In order to make the empirical results more straightforward,this paper selects Huadong Pharmaceutical Co.,Ltd.,located in the disaster area of the typhoon “HaiKui”,as a case company for analysis.By establishing indicators such as investment expenditure,investment opportunities,cash flow,financing status,and investment efficiency,the company's investment and investment efficiency during pre-disaster and pro-disaster period are compared.Finally,some policy suggestions are put forward based on the research results,and the shortcomings of the paper are pointed out.This paper can provide reference for the study of natural disasters and micro-enterprises,and can also provide empirical support for enterprises and governments to better cope with natural disasters.