A Study On Government Subsidies And Economic Consequences Of Listed Companies

Under the background of China’s economic transformation, especially in the "12th Five-Year" plan, the government subsidy has become an indispensable way in the process of enterprise development. Through the use of the most direct means of government subsidies, the government can more effectively interfere with the investment and business activities of enterprises, and ultimately achieve the political and economic purposes of the government. Government subsidies can help not only to help the loss of corporate profitability, but also an important source of corporate investment funds, which is usually a huge amount and has a free. In recent years, the listed companies received government subsidies of more frequent phenomenon,according to wind database, the deadline of 31 December 2014. In the current reporting period, the government to 2448 listed companies in a stock market which provides government subsidies, the number of companies accounted for A-share listed companies of the total number of 94.45%, the overall amount of subsidy up 923 billion, growth of 26.09% compared with an annual report. Facing the so prevalent phenomenon of subsidies, government subsidy of appropriateness and necessity to questioned and challenged by social, as the government direct intervention enterprise management means, the "helping hand" the purpose and function caused by the scholars in a wide range of thinking and discussion. In each fiscal year, the government will have a lot of grant funds flow to the enterprise, the enterprise on funding. At this time the funds in the enterprise plays a role in what: government subsidies can improve the profitability of enterprises, is to promote the enterprise’s investment? Or contrary to the government’s expectations, the government subsidies for enterprises not only useless, but also hindered the development of enterprises.Based on the above background, in this paper, and the government subsidy related theory are described and analyzed, on the basis of this theory, on the A-share market of government subsidies for annual and industry statistics and on the present reality of government subsidies in the A-share market analysis, finally to continue toget government subsidies of high-tech enterprises on behalf of, Hanwang Technology as an example, to explore why Hanwang Technology has such frequent government subsidies, and the government subsidy to analyze the economic consequences of Hanwang Technology in investment performance and produce. Case study found that Hanwang Technology business performance is highly dependent on government subsidies, government grants influence the Hanwang Technology Investment Scale and investment industry. For listed companies, if excessive dependence on government subsidies to make up for the loss making enterprises or rely on government subsidies to enterprises for investment is not a long-term strategy, this will let company executives ignored company really exist and the correct way to solve the problem, at the same time, if a means of government subsidies is just as the enterprise to adjust the surplus and this will be detrimental to the utility maximization of government funds.I hope this research can give listing Corporation managers, the relevant regulatory authorities and investors to bring a wake-up call, to regulate the behavior of government subsidies.