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Government subsidies and firm performance: Evidence from high-tech start-ups in China

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  • Luo, Xingwu
  • Huang, Feifei
  • Tang, Xiaobo
  • Li, Jialong

Abstract

This study applies fsQCA to examine the effectiveness of government subsidies on the performance of high-tech start-ups under different configurations. We find that 1) selective subsidies can help ventures maintain high-performance regardless of the legal environment in which start-ups operate; and 2) start-ups with non-selective subsidies do not necessarily have high-performance if they operate in regions with weak legal protection and face strong market competition. We contribute to the literature by emphasizing that the effectiveness of government subsidies relies on the interplay of firm attributes and legal environment. Our findings also have practical implications for government support of sustainable entrepreneurs.

Suggested Citation

  • Luo, Xingwu & Huang, Feifei & Tang, Xiaobo & Li, Jialong, 2021. "Government subsidies and firm performance: Evidence from high-tech start-ups in China," Emerging Markets Review, Elsevier, vol. 49(C).
    • Handle: RePEc:eee:ememar:v:49:y:2021:i:c:s1566014120301394
    DOI: 10.1016/j.ememar.2020.100756
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    Cited by:

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    2. Ke Mao & Junxin Huang, 2022. "How Does Climate Policy Uncertainty Affect Green Innovation? Evidence from China," IJERPH, MDPI, vol. 19(23), pages 1-14, November.
    3. Danlei Feng & Mingzhao Hu & Lingdi Zhao & Sha Liu, 2022. "The Impact of Firm Heterogeneity and External Factor Change on Innovation: Evidence from the Vehicle Industry Sector," Sustainability, MDPI, vol. 14(11), pages 1-15, May.
    4. Lee, Chien-Chiang & Tang, Manting & Lee, Chi-Chuan, 2023. "Reaping digital dividends: Digital inclusive finance and high-quality development of enterprises in China," Telecommunications Policy, Elsevier, vol. 47(2).
    5. Chen, Shi & Huang, Fu-Wei & Lin, Jyh-Horng, 2022. "Life insurance policyholder protection, government green subsidy, and cap-and-trade transactions in a black swan environment," Energy Economics, Elsevier, vol. 115(C).
    6. Zhang, Wenwen & Chiu, Yi-Bin, 2023. "Country risks, government subsidies, and Chinese renewable energy firm performance: New evidence from a quantile regression," Energy Economics, Elsevier, vol. 119(C).

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