The Effect Of Local Government's Subsidy To The Cost Of Listing On NEEQ

Small and medium-sized enterprises are an important part of China's market economy,and the development of small and medium-sized enterprises is of great significance to enhance the vitality of the economy.However,the financial problems have seriously restricted the development of these enterprises.National Equities Exchange and Quotations(NEEQ),which has a low threshold for entry,provides a way to solve the financing problem of these enterprises.With the expansion of NEEQ,the local government has introduced subsidies to encourage enterprises to list on NEEQ.These policies are basically given a certain amount of cash incentives to enterprises successfully listed on NEEQ,Compared with other capital markets,NEEQ has many disadvantages.For example,the quality of listed companies is uneven,lack of liquidity and other issues.In this context,the effect of local government subsidies needs to be tested.This paper takes enterprises that listed on NEEQ from September 2014 to October 2016 as the research object,using empirical analysis to study the property and effect of listing subsidy.First of all,this paper study on the nature of the listing subsidies,the results show that subsidies are not particularly inclined to a certain type of business.That is,these subsidies are inclusive,and subsidies have no effect on the choice of intermediaries.In addition,listing subsidies did not increase the liquidity of stock after listed on NEEQ,even negative to the liquidity of the stock.It can be assumed that some subsidized enterprises have poor business performance before listed on NEEQ.These enterprises are largely due to the stimulation of subsidies and apply for listing.In contrast,this phenomenon is less in non-subsidized enterprises.If this is the case,the amount of change in business performance and tax burden before and after listing of subsidized enterprises will be greater than that of non-subsidized enterprises.The difference in the amount of change can be considered as the effect of subsidies.Based on the above ideas,this paper uses the Difference-in-Difference model(DID)to analyze the impact of listing subsidies on business performance and tax burden.The results show that the business performance and operational capacity are positively related to the listed subsidy.The listed subsidy has no significant effect on the business tax rate of the enterprise,but it is positively related to the actual tax rate.This effect is not a direct effect caused by subsidies,but the indirect effect of standardized management,reputation and other factors after the listed on NEEQ.