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Relationship between government subsidies and audit quality: Unveiling the role of ownership structure

Author

Listed:
  • Zhou, Ze
  • Yuan, Cuifang
  • Ren, Fei
  • Che, Pengjia

Abstract

This study examines the relationship between government subsidies and audit quality using panel data from Chinese A-share listed companies from 2018 to 2022. It further investigates the moderating effects of ownership structure, specifically ownership concentration and institutional ownership. The empirical findings show that government subsidies improve audit quality. However, the higher the ownership concentration, the weaker the positive relationship between government subsidies and audit quality. Furthermore, institutional investors’ relatively high equity holdings reduce the promotional impact of government subsidies on audit quality.

Suggested Citation

  • Zhou, Ze & Yuan, Cuifang & Ren, Fei & Che, Pengjia, 2025. "Relationship between government subsidies and audit quality: Unveiling the role of ownership structure," Finance Research Letters, Elsevier, vol. 71(C).
    • Handle: RePEc:eee:finlet:v:71:y:2025:i:c:s1544612324015174
    DOI: 10.1016/j.frl.2024.106488
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