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The more subsidies, the longer survival? Evidence from Chinese manufacturing firms
Abstract
Abstract How do government subsidies affect firm survival? By using Chinese firm‐level data for 1998 to 2007, we show that, on average, there is a positive and significant impact of government subsidies on firm survival. We also investigate the heterogeneous effects of government subsidies with different intensities on firm survival, and find that moderate‐intensity government subsidies exert a positive impact on firm survival, while high‐intensity government subsidies increase the exit probabilities, the underlying mechanisms via subsidy‐seeking investment and innovation incentive weakening are supported by empirical evidence. Furthermore, we explore the role of governance institutions in the subsidy–survival relationship, and find that the positive impact of government subsidies on firm survival is more pronounced in regions with better governance institutions.
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“Mao and Xu (2018) argue that there should be a moderate range of government subsidies in which companies can be more productive.”
From Integration of TAM and TPB in Explaining Technology Adoption Intentions: A Meta-Analytic Structural Equation Modeling Approach (2022) · cites this paper as Mao and Xu (2018)
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Cited by
Sorted by citations
Chen, X. (2022) · doi:10.1016/j.jik.2022.100189 · Cited by 107
Metadata
- Authors
- Mao, Q., & Xu, J.
- Affiliations
- Nankai University (CN)
- Corresponding author
- Xu, Jiayun
- ORCID
- Venue
- Review of Development Economics
- Publisher
- Wiley
- Published
- 2017-11-29
- Volume
- 22
- Issue
- 2
- Pages
- 685-705
- ISSN
- 1363-6669 (ISSN-L)
- 1467-9361
- OpenAlex
- W2769108739
- Cited by
- 16
- References
- 42
- Citations by year
- 2026: 2 · 2025: 1 · 2024: 4 · 2023: 4 · 2022: 3 · 2020: 2
- FWCI
- 0.98
- Type
- journal article
- Language
- en
- Open access
- closed
- Locations
- Review of Development Economics (publishedVersion)
- Funders
- National Natural Science Foundation of China (71403135, 71773055)
- Ministry of Education of the People's Republic of China (16YJC790114)
- Topics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Innovation Policy and R&D
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Firm Innovation and Growth
- Social Sciences › Business, Management and Accounting › Strategy and Management › Political Influence and Corporate Strategies
- Keywords
- government subsidies, business survival, firm exit, innovation incentives, governance institutions, Chinese manufacturing firms, firm heterogeneity
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