Government subsidies and total factor productivity of enterprises: a life cycle perspective

Ma, Yonghong; Ni, Huili; Yang, Xiaoguang; Kong, Lingkai; Liu, Chunmei

doi:10.1007/s40888-022-00292-6

Cited by 11 publications

(6 citation statements)

References 71 publications

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“…One study [ 34 ] even discovers that subsidized companies aggressively smooth their earnings compared to unsubsidized companies. Another study [ 35 ] finds that government grants negatively affect the total factor productivity of businesses and induce unproductive rent-seeking activities rather than productive rent-seeking activities.…”

Section: Theoretical Analysis and Hypotheses Developmentmentioning

confidence: 99%

The “heterogeneous” effect of government grants on bank lending

Gu,

Zhang

2023

PLoS ONE

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This study aims to test whether banks can recognize different signals from different types of government grants received by their clients and respond differently. Using a novel panel data set from China, we construct a three-way fixed-effect regression model and empirically explore the effect of government grants received by banks’ clients on banks’ lending decisions. We find that banks have heterogeneous attitudes towards their clients when the clients receive different types of government grants. In particular, we discover that banks behave positively toward clients who receive "development supportive" grants but negatively toward clients who receive "helping hand" grants. The main results hold after a series of robustness tests. Our study offers fresh perceptions on how banks see government grants of their clients while making lending choices. Our finds will offer certain inspirations for government grant policies and bank lending decisions.

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Section: Theoretical Analysis and Hypotheses Developmentmentioning

confidence: 99%

The “heterogeneous” effect of government grants on bank lending

Gu,

Zhang

2023

PLoS ONE

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“…Ultimately, this deviates from the priorities related to value creation [76]. Due to the unproductive rent-seeking activities, companies cannot sensi-bly allocate resources [69]. Consequently, non-SOEs are more negatively influenced by government subsidies than SOEs regarding green innovation efficiency.…”

Section: Sub-sample Analysismentioning

confidence: 98%

“…Nevertheless, some researchers suggest dividing the life cycle into four stages [69], with Faff et al [70] combining the shake-out stage and decline phase. Subsequently, the four steps are finalised as an introduction, growth, maturity and decline in this paper.…”

Section: Sub-sample Analysismentioning

confidence: 99%

Fiscal and Tax Policies, Access to External Financing and Green Innovation Efficiency: An Evaluation of Chinese Listed Firms

Sam

et al. 2023

Sustainability

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China has placed significant importance on the development of a circular economy and achievement of sustainable prosperity. It employs multiple fiscal and tax policies to facilitate clean production and improve resource efficiency by fostering corporate green innovation. Policy signalling boosts companies’ external funding, including debt and equity. As such, this research focuses on how government subsidies and tax incentives influence corporate green innovation efficiency, accounting for the mediating roles of debt financing and equity financing. Under the SBM model, we utilise the Luenberger index to quantify green innovation efficiency. In addition, the fixed-effect regression with 19,228 firm-year observations from 3549 firms between 2015 and 2021 is used. Based on empirical findings, government subsidies reduce green innovation efficiency, while tax incentives increase it. In addition, debt financing mediates the association between tax incentives and corporate green innovation efficiency. Furthermore, government subsidies and tax incentives play more significant roles in non-state-owned enterprises (non-SOEs) and for businesses in growing and mature stages than other listed firms. To improve access to external financing and green innovation efficiency, it is suggested that the government implement various government subsidies or tax incentives according to business characteristics, with each company applying policies customised to its specific circumstances.

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“…Upon reviewing previous studies on corporate rent-seeking (see Table 1), we observed that prior research predominantly concentrated on its external influences while overlooking the study of internal corporate factors. Emphasis has been placed on aspects such as religious traditions [2], officials' Chinese vernacular culture [32], government subsidies [33], and perfect checks [34]. Although Ciabuschi et al (2012) [1] suggest that a technology transfer capability grants subsidiaries greater bargaining power, consequently fostering rent-seeking behavior, and Lin and Xie (2023) [33] demonstrate that the social network of the board of directors effectively suppresses managerial rent-seeking, these studies ignore the role of relevant contingent factors.…”

Section: Corporate Rent-seekingmentioning

confidence: 99%

Does Digitalization Strategy Affect Corporate Rent-Seeking? Evidence from Chinese-Listed Firms

Yu,

Liu

2024

Systems

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The issue of corporate rent-seeking, which stems from the misuse of authority, remains a critical concern for the international community. Drawing on agency theory and resource dependence theory, this study explores the relationship between corporate digitalization strategies (DSs) and corporate rent-seeking. We test our theoretical hypotheses by utilizing panel data encompassing Chinese A-share listed companies from 2004 to 2021. Our findings suggest that corporate DSs have a significant negative influence on rent-seeking. Several robustness tests support this conclusion. Moreover, our analysis indicates that a DS is particularly effective in curtailing rent-seeking behaviors within state-owned enterprises (SOEs) compared with their non-state-owned counterparts. However, contrary to our hypothesis, a DS is less effective in suppressing corporate rent-seeking among firms where the executive team has legal backgrounds. These findings suggest that top managers, especially within SOEs, should prioritize the early formulation of digital transformation strategies to reduce rent-seeking behavior. Additionally, when implementing digital transformation, firms should carefully integrate members with legal backgrounds into their executive teams and strengthen ethical education and supervision for executives with legal expertise.

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Government subsidies and total factor productivity of enterprises: a life cycle perspective

Cited by 11 publications

References 71 publications

The “heterogeneous” effect of government grants on bank lending

The “heterogeneous” effect of government grants on bank lending

Fiscal and Tax Policies, Access to External Financing and Green Innovation Efficiency: An Evaluation of Chinese Listed Firms

Does Digitalization Strategy Affect Corporate Rent-Seeking? Evidence from Chinese-Listed Firms

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