| The coordination of industrial policy with fiscal policy and monetary policy has increasingly become an important feature of China’s macro-control policy system.Subsidy is the intersection of industrial policy and fiscal policy,which provides an important perspective to study the coordination of industrial policy and fiscal policy in macro-control.However,the existing research mostly studies subsidies from the perspective of industrial policy,and lacks analysis based on the perspective of fiscal policy.Based on the perspective of fiscal policy,this paper examines the cyclical characteristics of subsidies and their economic stability functions from the distribution characteristics of subsidies and their incentive effects on enterprises.By matching China’s macroeconomic data and A-share listed companies’ microdata,the empirical research in this paper finds that: first,in terms of the distribution characteristics of subsidies,the level of corporate subsidies in the economic downturn has increased significantly,which is consistent with the basic requirements of discretionary fiscal policy in the recession to reverse the economic cycle adjustment to stabilize the macroeconomic,which is different from the pro-cyclical fiscal expenditure pattern presented by a large number of developing countries.Specifically,when the output level of China’s macro-economy is 1 percentage point lower than its potential level,the subsidy scale of enterprises will increase by about 5 percentage points.At the same time,in the economic downturn,the dispersion of subsidies among enterprises will increase significantly.In the downturn,the subsidy scale of enterprises with high financing constraints and enterprises in non-key industries that need more policy support will increase significantly in the downturn,at the same time,the counter-cyclical characteristics of enterprise subsidies in the downward period are mainly concentrated in the east rather than the central and western regions.Second,in terms of the incentive effect of subsidies on enterprises,compared with the economic upward period,subsidies in the economic downward period have more significantly promoted the investment and employment expansion of enterprises,and played a role in stabilizing the economy at the micro level,indicating that subsidies distributed at the enterprise level have both industrial and financial policy functions.Specifically,in the economic downturn,the subsidies received by enterprises increased by 1percentage point,and their investment and employment levels were about 4percentage points higher than those in the economic downturn.In general,this incentive effect was more significant in non-state-owned enterprises,enterprises with high financing constraints,and enterprises in non-key industries.At the same time,the role of subsidies was mainly reflected in investment expansion among enterprises in the eastern region,In the central and western regions,the employment level has improved.The above findings are still significantly valid after endogenous problem treatment and a series of robustness tests.The research in this paper shows that while subsidies play the role of industrial policy,their distribution characteristics and mechanism of action also meet the basic requirements of stabilizing the economy.The current allocation of subsidies meets the requirements of the policy system of industrial policy and fiscal policy to coordinate macro-control. |
