Study On The Impact Of Government Subsidies And Tax Incentives On The Level Of Maturity Mismatch Of Corporate Investment And Financing

The Central Economic Work Conference called for strengthening the coordination of various policies to effectively prevent and resolve major economic and financial risks,and strictly set the tone for economic development in 2023 to keep the word stable,yet the phenomenon of maturity mismatch in China’s corporate investment and financing is widespread,and its implied liquidity risk will have an impact on the risk level of China’s overall economy.For example,Sanko Group and Oriental Garden are facing great liquidity pressure because of their unreasonable investment and financing structures,and some head real estate enterprises even have the potential to trigger systemic risks because of their overly aggressive debt structures.In recent years,China’s economy has faced triple pressure of demand contraction,supply shocks and weakening expectations,development conditions have changed profoundly,structural and stable growth has become the goal of economic development,and tax incentives and policy subsidies policies,as the main components of China’s industrial policy,have taken on the important responsibility of coping with the volatile situation.So can this pair of policy tools play a role in alleviating the level of maturity mismatch between investment and financing when faced with the problem of maturity mismatch between investment and financing of enterprises? What kind of companies will they be more effective for? Are other factors influencing their effectiveness?To investigate the above questions,this paper combines theoretical research and empirical analysis,and conducts an empirical study after selecting reasonable indicators to measure the level of maturity mismatch of enterprises’ investment and financing and the support of government subsidies and tax incentives by reading the literature,and selects a total of 20,922 observations of 4230 listed companies in Shanghai and Shenzhen A-shares from 2014-2021.The study assesses the impact of government subsidies and tax incentives on the maturity mismatch of corporate investment and financing,and explores the heterogeneity of the policy implementation effects.This paper finds that the implementation of government subsidies and tax incentives significantly reduces the maturity mismatch of corporate investment and financing.Specifically,the government subsidies mitigate the maturity mismatch of investment and financing of advanced manufacturing enterprises much more than the average effect of traditional manufacturing enterprises,all manufacturing enterprises and all listed enterprises,and the tax incentives mitigate the maturity mismatch of investment and financing of manufacturing enterprises more than the average of all listed enterprises.The government subsidies are much more effective in mitigating the maturity mismatch of investment and financing for enterprises with high asset-liability ratios and high current liabilities than for general enterprises.Compared with non-hightech enterprises,government subsidies are more effective in mitigating the maturity mismatch between investment and financing for high-tech enterprises.Tax incentives mitigate the maturity mismatch of investment and financing more strongly for non-state enterprises than for state-owned enterprises.When considering the moderating effect of financing constraints,the effect of tax incentives and government subsidies on the maturity mismatch of investment and financing for enterprises with financing constraints will be weakened,thus reducing the effect of fiscal policy on optimising the maturity structure of enterprise investment and financing.Combining the current situation of policy implementation and the empirical findings,corresponding policy recommendations are given.Firstly,the characteristics and advantages of government subsidies and tax incentives policy tools are brought into play,and different policy tools or policy combinations are introduced for different policy objectives and role enterprises.Secondly,in order to achieve high-quality modernised industrial reform,consider increasing the proportion of competitive government subsidies and tax incentives,bringing into play the decisive role of the market in resource allocation and optimising the structure and precision of policy implementation.Again,banking financial institutions can increase their credit support to key industries,deepen the integration of banking and financial technology,and promote the formation of a virtuous cycle of "technology-industry-finance".Finally,the construction of a modern industrial system can be synchronised with the green transformation of economic and social development,so as to improve the core competitiveness of the country’s manufacturing industry while implementing the goal of achieving peak carbon neutrality.