The Influence of Geographical Factors on Government Subsidies: An Empirical Evidence Based on Chinese Private A-share Listed Companies

doi:10.15936/j.cnki.1008-3758.2022.06.003

Journal of Northeastern University(Social Science) ›› 2022, Vol. 24 ›› Issue (6): 13-22.DOI: 10.15936/j.cnki.1008-3758.2022.06.003

• Economics and Management • Previous Articles Next Articles

The Influence of Geographical Factors on Government Subsidies: An Empirical Evidence Based on Chinese Private A-share Listed Companies

CAI Qingfeng¹， LIN Haihan¹， CHEN Wuyuan²

(1. School of Economics， Xiamen University， Xiamen 361005， China; 2. Institute of Education， Xiamen University， Xiamen 361005， China)

Received:2021-08-15 Revised:2021-08-15 Accepted:2021-08-15 Published:2022-11-26
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Abstract

Abstract: Geographical factors have an important impact on economic decision-making and social relations among different economic subjects. From the perspective of geographical economics， by using the data of listed private enterprises and the theories of political connections and government subsidies， the influence of geographical factors on enterprises' seeking of government subsidies is discussed. The results show that the closer the geographical distance between the enterprise and the local government is， the higher the government subsidy income the enterprise can obtain， meaning that the enterprise establishes “implicit political connections” by virtue of geographical proximity. This phenomenon is more obvious in enterprises with higher degree of financing constraint， but has no significant correlation with the enterprise size. Rent-seeking behavior of enterprises is the main mechanism for constructing implicit political connections. Geographical proximity and political connections have a substitution effect on the impact of corporate government subsidies， while political and business distance and corporate donation have complementary roles in influencing corporate government subsidies.

Key words: geographical distance; government subsidy; political connection; private enterprise

CLC Number:

F812

CAI Qingfeng， LIN Haihan， CHEN Wuyuan. The Influence of Geographical Factors on Government Subsidies: An Empirical Evidence Based on Chinese Private A-share Listed Companies[J]. Journal of Northeastern University(Social Science), 2022, 24(6): 13-22.

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The Influence of Geographical Factors on Government Subsidies: An Empirical Evidence Based on Chinese Private A-share Listed Companies

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