Study On The Effect Of Government Subsidies On The Benefits Of ST Listed Companies

Nowadays, government subsidies exist in almost every country of the world.The government subsidies for listed companies have become a common phenomenon in the capital market. Under the increasingly competitive economic environment,government subsidies have become a means of government intervention and participation in the economy, and then achieving the established economic and political goals. In our country, the forms of government subsidy are various, and they have a significant influence on the adjustment of the economic market and the steady development of the economy of our country. In this thesis, the effect of government subsidies on both the operational effectiveness and the social benefits of the companies was studied, the ST listed companies in China’s A share market from 2010 to 2014 chosen as the sample. Indexes ROA and IOR were used to measure the operational effectiveness in both the short time and long time. And the social benefits were measured in terms of the social employment level. The conclusion is that government subsidy can improve the operational effectiveness of the sample companies in the short term. While in the long term, government subsidy cannot essentially help the sample companies to develop their main business and enhance their competitiveness, indicating that the motivation for companies to get government subsidy is to retain their ST listed qualification. What’s more, the government subsidy and social employment level showed a significant positive correlation, suggesting that government subsidy can improve the social employment, so as to improve the social benefits. So it can be seen that the government subsidy still plays a certain policy effect. According to the study conclusions, some suggestions for the government subsidy and ST system were also put forward in this thesis.