Research On The Impact Of Government Subsidies On The Performance Of HC SemiTek

For the purpose of protecting domestic infant industries and supporting industrial development,the government often intervenes in the production and operation of enterprises by means of government subsidies.The policies implemented by the government will inevitably affect the behavior and benefit of enterprises in the market,while subsidies,as an effective means of direct intervention,will largely affect the investment behavior of enterprises,and then affect the development of enterprises.Under the current background of resource shortage,environmental deterioration and increasingly fierce global competition,LED has attracted the attention of the government due to its long service life,energy conservation and environmental protection,and LED industry has also become the focus of government subsidies.Therefore,this paper takes HC Semi Tek of the LED industry as a case company,studies the effect of government subsidies in combination with corporate investment behavior,and analyzes how government subsidies affect corporate investment and then corporate performance.After reviewing relevant literature,this paper conducts theoretical analysis on government subsidies,enterprise investment and enterprise performance based on government intervention theory,principal-agent theory and free cash flow hypothesis.In the part of case study,firstly,this paper analyzes and explains the basic situation of HC Semi Tek and its government subsidies as well as the reasons for the subsidies.Then,it mainly analyzes the effect of government subsidy on HC Semi Tek’s investment from two dimensions: fixed assets investment and R&D investment.Changes of investment behavior will also reflected in the performance,so in this paper,HC Semi Tek’s financial performance is analyzed.On the basis of the above research,this paper also analyzes and explains the reasons for the effect of government subsidies on HC Semi Tek.In the end,this paper concluded that the government subsidies guide the H company’s investment field and investment region,improve the enterprise profits;however on the whole,HC Semi Tek has a certain degree of excessive investment,the scale benefit shows a decreasing trend,the operation capacity declines,and compared with the large-scale investment of fixed assets,the investment in R&D and innovation is relatively insufficient.In the early time subsidies play an obvious incentive role in R&D investment,but in the middle and late period,the incentive effect weakens and gradually presents a crowding out effect.In addition,the quality of R&D still needs to be improved,so the actual ability of enterprises to create profits has not been well improved.On the basis of the above-mentioned research and conclusions,this paper presents some advice from the point of view of the government and enterprises,and hope that it can provide some help for improving the efficiency of the use of government subsidies.