Research on the Effect of Government Subsidy on the Value Creation Ability of Listed Companies

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.