Government Subsidy,product Market Competition And Investment Efficiency

Since the reform and opening up,the rapid development of Chinese enterprises is inseparable from the leading role of the government in economic growth.The local government’s GDP competition model has induced massive subsidies to micro-enterprises by governments at all levels in China.The two intertwined forces of "Market Competition-invisible hand" and "Government Subsidy-visible hand" have become the key to understanding the development of Chinese enterprises since the reform and opening up.This leads to a question that is puzzling and inspires us to think deeply: in the process of affecting the investment efficiency of enterprises,is the effect of market competition and government subsidies simply superimposed,or whether 1+1 >2 or 1 +1 <2 effect? Whether it can maximize the effect of the two at the same time,and achieve the goal of "having it both ways".At present,domestic and foreign studies have examined the relationship between the two independent dimensions of competition and subsidies,and the relationship between the two and the investment efficiency of enterprises.There are few literatures linking the mechanism of action of the two to study.Based on the above confusion and thinking,this paper takes the listed companies in the Shenzhen securities market from 2008 to 2020 as the main research samples,designs an econometric model,constructs panel data,and analyzes the investment efficiency of government subsidies and product market competition from both theoretical and empirical levels.The study found the following economic phenomena:First,the spatial distribution and industrial distribution of government subsidies and product market competition are significantly different.From the perspective of industry,the distribution of government subsidies among industries is relatively concentrated,mainly in manufacturing,mining,transportation,warehousing and postal services,electricity,heat,gas and water production and supply,and construction;China’s entire industry product market competition index continued to decline during the observation period,the degree of product concentration became weaker and weaker,the degree of product competition continued to strengthen,the development of industrial product market competition was uneven,mining,information transmission software and information technology services,leasing and business services.The degree of competition in the product market of the industry and education industry has been continuously strengthened.From the perspective of spatial area,the cumulative government subsidies received by listed companies in the four major regions of the northern coastal economic zone,the middle reaches of the Yangtze River economic zone,the southern coastal economic zone and the eastern coastal economic zone accounted for 63.14% of the average total amount of government subsidies in that year.Concentrated in economically developed areas;the most intense product market competition area is the economic zone in the middle reaches of the Yangtze River,and the performance of other economic zones is relatively balanced.Second,the paper analyzes the investment efficiencies from industrial perspective.When independently examining the correlation between government subsidies and investment efficiency,it was found that government subsidies in four industries: agriculture,forestry,animal husbandry and fishery,electricity,heat,gas and water production and supply,transportation,storage and postal services,information transmission software and information technology services.The bigger amount of government subsidies for agriculture,forestry,animal husbandry and fishery,the lower the investment efficiency of above industries.On the contrary,electricity,heat,gas and water production and supply,transportation,storage and postal services,as well as information transmission software and information technology services.The more the government subsidy,the higher the industrial investment efficiency.When independently examining the correlation between product market competition and investment efficiency,it is found that product market competition in five industries: mining,manufacturing,electricity,heat,gas and water production and supply,information transmission software and information technology services,and finance the investment efficiency of the industry has an impact.Among them,the weaker the product market competition in the mining industry and the financial industry,the higher the investment efficiency.The improvement of product market competition of the manufacturing,electricity,heat,gas and water production and supply industries,information transmission software and information technology service industries.,which helps to improve investment efficiency.In the joint test of the impact of government subsidies and product market competition on investment efficiency,it is found that the phenomenon that the estimated coefficients of government subsidies and product market competition are simultaneously significant in the same industry does not exist.Specifically,the higher the government subsidies for agriculture,forestry,animal husbandry and fishery,leasing and business services,the lower the investment efficiency of the above industries;the higher the government subsidies for information transmission software,information technology services and financial industries,the higher the investment efficiency;mining The stronger the product market competition in industry and manufacturing,the higher the investment efficiency.Third,the paper analyzes the investment efficiencies from the perspective of spatial.The product market competition in the Northeast Economic Zone is strengthening,but with the continuous improvement of government subsidies in the Northeast Economic Zone,the impact of product market competition on the investment efficiency of the Northeast Economic Zone is weakening,and the effect is not significant.There is a substitution effect between government subsidies and product market competition.The increase in government subsidies is far greater than the increase in investment efficiency,and the marginal effect of government subsidies is low.Excessive government intervention in the market is not conducive to the effective use of market mechanisms,and market entities have developed inertia.The reduction of government subsidies in the northern coastal economic zone will help improve the efficiency of regional investment.The impact of increased product market competition in this region on investment efficiency is not significant.The transition from government intervention to a market mechanism is a process that cannot be accomplished overnight.There is a substitution effect between government subsidies and product market competition in the eastern coastal economic zone,the market mechanism is playing an increasingly larger role,the impact of government subsidies on the investment efficiency of the economic zone is weakening,and product market competition has a substitution effect on government subsidies.The continuous increase of government subsidies in the Great Northwest Economic Zone has not a positive impact on the improvement of investment efficiency,but hindered the improvement of investment efficiency.Based on the problems identified in the research,combined with my country’s current national conditions,this research puts forward policy recommendations from two dimensions of government and enterprises.The first is to improve the standardized management of the government subsidy process;the second is to focus on protecting the innovation achievements of enterprises;the third is to implement differentiated government subsidy policies;the fourth is to create a good external market institutional environment;sixth,enterprises should improve their internal governance and supervision mechanisms.The innovations of this paper are as follows: First,the government subsidy and market competition are brought into the same framework to analyze the impact on investment efficiency.Analyze the impact of government subsidies and individual market competition on investment efficiency to identify the impact of a single resource rationing system on enterprise investment efficiency.There are complementary effects or substitution effects.The second is to study the impact of government subsidies and product market competition on investment efficiency from two dimensions of industry and space.There are differences in government subsidies and market competition between different industries,different regions,and even between different industries in the same region.Unified research will inevitably cover up the differences between individual industries and individual regions.It is inevitable to formulate countermeasures and suggestions based on the overall estimation conclusion.Therefore,based on the two dimensions of space and industry,this research analyzes the investment efficiency of micro-enterprises at three levels: the impact of government subsidies on enterprise investment efficiency,the impact of market competition on enterprise investment efficiency,and the impact of government subsidies and market competition on enterprise investment efficiency.