The Impact of Government Subsidies on the R & D Investment and Business Performance of GEM Enterprises in China

Yazhu Feng^1, and Siyu Zhai¹

¹School of Economics and Management, Shanxi University, Taiyuan, China

Cite this paper:
Yazhu Feng and Siyu Zhai. The Impact of Government Subsidies on the R & D Investment and Business Performance of GEM Enterprises in China. Journal of Finance and Accounting. 2020; 8(1):16-22. doi: 10.12691/jfa-8-1-3

Abstract

Based on the data of China's GEM companies from 2015 to 2017, this paper uses linear regression analysis model to verify the relationship among government subsidies, R&D investment and business performance. The results show that government subsidies have no significant impact on business performance, but when the intensity of government subsidies increases, the R & D investment of GEM enterprises also increases significantly. On this basis, we also concluded that the existence of R & D investment makes the government subsidies to be positively correlated with the business performance. Therefore, there is a mediating effect of R & D investment between government subsidies and business performance.

Keywords:
government subsidies R & D investment business performance mediating effect

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