Author(s)

Changping Chen ^1,2, Chia-Ching Cho ¹

Affiliation(s)

¹ Department of Accounting and Information Technology, National Chung Cheng University, Chiayi, Taiwan, Republic of China
² Business School, Yango University, Fuzhou, Fujian, China

Corresponding Author

Chia-Ching Cho

ABSTRACT

Fiscal subsidies are often used for economic recovery in special periods and to support specific industries or enterprises. But whether financial subsidies can play a substantial role for industry development and enterprise value enhancement has been questioned. In view of this, based on the research object of China’s listed agricultural, forestry, animal husbandry and fishery companies, this paper discusses whether the government subsidy has a real and effective influence on the value creation ability of listed companies. Based on the setting of relevant control variables and constructed a multiple linear regression model, this paper uses multiple linear regression model to analyze the relationship between government subsidies and the value of listed companies. The results of the research are that the government subsidy has a significant negative correlation effect on the value creation ability of listed companies. However, the classification of government subsidies based on whether they are related to business activities does not affect the value creation ability of listed companies. It can be concluded from the research results that the state financial subsidy policy cannot play an effective role in improving the value creation ability of listed companies.

KEYWORDS

The government subsidies, Value creation ability, Agriculture, Forestry, Animal husbandry and fishery

CITE THIS PAPER

Changping Chen, Chia-Ching Cho. Research on the Effect of Government Subsidy on the Value Creation Ability of Listed Companies. Accounting and Corporate Management (2020) 2: 20-30. DOI: http://dx.doi.org/10.23977/acccm.2020.020102.

REFERENCES

[1] Nicholas, B. and Van Reenen, J. (2002) Patents, Real Options and Firm Performance. The Economic Journal, 478, 97-116.
[2] Katrin, H. (2008) R&D and Subsidies at the Firm Level: an Application of Parametric and Semiparametric Two-step Selection Models. Journal of Applied Econometrics, 6, 729-747.
[3] Russell, T. and Elizabeth, W. (2013) Innovation and Productivity. The Australian Economic Review, 4, 483-488.
[4] Wu, J. and Huang, D.M. (2016) R&d Subsidies, Industry-university-research Cooperation and Innovation in Strategic Emerging Industries. Research Management, 9, 20-27.
[5] Gong, L.X. and Lu, X.J. (2018) Government Subsidies and Enterprise Technology Innovation Efficiency. Journal of Henan University (Social Science Edition), 2, 22-29.
[6] Lin, W.L. and Zhang, L.Q. (2004) Efficiency of Government Tax Subsidy Policy for Leading Enterprises in Agricultural Industrialization: Based on Agricultural Listing: A Case Study of the Company. China Rural Economy, 10, 25-30.
[7] Laursen, K. and Salter, A. (2006) Open for Innovation: The Role of Openness in Explaining Innovation Performance among UK Manufacturing Firms. Journal of Strategic Management, 27, 113-130.
[8] Demir, F. (2009) Capital Market Imperfections and Financialization of Real Sectors in Emerging Markets: Private Investment and Cash Flow Relationship Revisited. World Development, 5, 71-92.
[9] Yan, Z.J. and Yu, J.P. (2017) Government Subsidies and Total Factor Productivity. Industrial Economic Research, 1, 1-13.
[10] Lin, W.M. and Chen, J.L. (2019) Evaluation of the Effect of Government Subsidies on the Export of Papermaking Enterprises. Economic Problems of Forestry, 5, 544-551.
[11] Fan, L.B. (2012) Diversification, Government Subsidies and Agricultural Enterprise Performance. Agricultural Economic Problems, 11, 44-50. 
[12] Xuan V.V. and Craig, E. (2017) An Empirical Investigation of Capital Structure and Firm Value in Vietnam. Finance Research Letters, 22, 90-94.

Sponsors, Associates, and Links

---

• Information Systems and Economics
  
  
• Accounting, Auditing and Finance
  
  
• Industrial Engineering and Innovation Management
  
  
• Tourism Management and Technology Economy
  
  
• Journal of Computational and Financial Econometrics
  
  
• Financial Engineering and Risk Management
  
  
• Social Security and Administration Management
  
  
• Population, Resources & Environmental Economics
  
  
• Statistics & Quantitative Economics
  
  
• Agricultural & Forestry Economics and Management
  
  
• Social Medicine and Health Management
  
  
• Land Resource Management
  
  
• Information, Library and Archival Science
  
  
• Journal of Human Resource Development
  
  
• Manufacturing and Service Operations Management
  
  
• Operational Research and Cybernetics