A New Expalination To Government Subsidies And Company Fasle Performance

In Recent Years,Many Listed Companies In China Have Gotten Huge Local Government Subsidies Directly And Indirectly.With The Benefits Of Local Government Subsidies,The Financial Standing Of Listed Companies Has Been Improved Significantly As Well As The Stock Price Rose Sharply And Rapidly.Besides,A Lot Of Listed Companies Have Regarded Local Government Subsidies As Customary Welfare,Which Becomes Such Morphine That The Listed Companies Need Urgently When In Bad Situation.These Above Make Us Want To Question:How Do The Local Government Subsidies Influence The Company Performance?Why Could The Local Government Offer Such Huge Subsidies Capriciously?As A Research Guide,This Paper Empirically Analysis These Two Questions Based On The Data About Listed Companies From 2007 To 2012.In Conclusion,The Results Show That:(1)Local Government Subsidies Improves Company Short-Term Performance Efficiently,Which Means The Company Performance Has Relied On The Local Government Subsidies O(2)Local Government Subsidies Would Decrease As Fiscal Decentralization Could Drive Local Government To Lay More Attention On Infrastructure Construction O(3)The False Prosperity Of Listed Company Caused By Local Government Subsidies Could Be Significantly Explained And Suppressed By Fiscal Decentralization.(4)There Exist Many Differences Between The Listed State-Owned And Non-State Company In This Research.Specifically,The Listed Non-State Companies Performed Much Better Than The Counterpart With The Same Of Local Government Subsidies In Short Term;The Listed State-Owned Companies Get More Local Government Subsides Even Though The Fiscal Decentralization;The False Prosperity Of Listed State-Owned Could Not Be Suppressed By Fiscal Decentralization As Same As The Counterpart Etc.This Paper Enriches Theoretical And Empirical Research On This Issue.Research Conclusions Can Provide References On Straightening Out The Relationship Between The Market And Government,Fiscal Decentralization And Regulating Local Government Subsidies In The New Normal,Which Owns Certain Theoretical And Practical Significance.