The Study On Impact Of Government Subsidies On The Operational Performance Of Growth Enterprises Market Listed Companies

As a tool of government’s macro-control policy, government subsidy is an important part of fiscal expenditure. It is widely used all over the world. To promote local economic and social development, government often has a variety of ways to support local enterprises. To some extent, these measures promoted the economic development and industrial upgrading of the region, and obtained a good policy results. However, there are still some government subsidies went to high energy consumption, high pollution and overcapacity industry, these subsidies wasting valuable financial resources but did not get a good economic benefits, and disturbed the normal market order, undermining the fair and equitable market environment as well. China is now facing major problems of slowing economic growth and industrial restructuring. There are many rich growing dynamic high-tech enterprises in GEM.Scientific and reasonable subsidies to GEM companies will promote the growth of enterprises and industrial restructuring. Therefore, it is necessary to analyze if the current government subsidy could really help GEM companies improve its economic efficiency and provide a reference for the optimal adjustment of policies and systems of government subsidies.First, we sort out the existing literature, and then start the theoretical analysis to identify the starting point for the government subsidy mechanism and provide theoretical support for further research. Then we briefly overview government subsidies and GEM, and discuss the mechanism of government subsidies to the operational performance of GEM listed companies.Based on theoretical analysis and review of the current situation. This article selected 275 GEM listed companies that received consecutive government subsidies from 2011 to 2013, using fixed effects model empirical method to study the impact of government subsidies to the economic efficiency of enterprises. Analysis of the full samples showed the presence government subsidies and ROE of next year, are positive correlated for GEM listed companies. According to the nature of property and industrial level, we found that subsidy efficiency of private enterprises is muchhigher than that of state-owned enterprises, ROE and government subsidies negatively related in state-owned enterprises. Government subsidy in secondary industry and tertiary industry can both improve the economic efficiency of enterprises,but the tertiary industry is much more obvious.Finally, we propose the following policy recommendations based on empirical results: First, establish and improve relevant laws and regulations of government subsidies, standardize the relationship between government and enterprises to build a harmonious and fair market environment. Second, establish a scientific and fair evaluation system of government subsidies efficiency. Third, deepen the reform of state-owned enterprises, improve operating efficiency. Fourth, make more efforts to support the tertiary industry, promote economic restructuring and upgrading.