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Study on the Interaction Effect between the Intensity of Government Low-Carbon Subsidies and the Growth Ability of Green and Low-Carbon Emerging Enterprises

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  • Lixia Chen

    (School of Marxism, Hefei Normal University, Hefei 230601, China)

  • Jianyuan Huang

    (School of Public Administration, Hohai University, Nanjing 210098, China)

Abstract

With the development of science and technology and society, people’s demand for a healthy living environment is increasing, and the expression “low carbon” has become a daily feature of people’s lives. The emergence of a low-carbon economy, the impact on the traditional industrial structure and the formation of a new economic landscape make China, a developing country, eager to seize this opportunity to enhance its international competitiveness. To achieve this, it is necessary to establish a low-carbon concept, to actively restructure industrial and develop low-carbon industries; only in this way can we take advantage of the new round of industrial restructuring and grasp the initiative of development. Therefore, this paper selects data from enterprises in the emerging low-carbon industry, and uses a SVAR model to conduct a dynamic interaction analysis between government subsidy intensity, enterprise profitability, asset growth capacity and enterprise size. The results of the study show that the intensity of government subsidies in the first period has a certain positive effect on a company’s current profitability and asset growth, the improvement being most significant on its profitability. Among the larger companies, asset growth and profitability in the first period had a significant positive impact on current earnings, and the contribution of profitability to the company’s own performance was much larger than the average; among the smaller companies, asset growth and profitability in the first period had a significant positive impact on current earnings, and the contribution of asset growth to the company’s own performance was much larger than the average. The intensity of prior government subsidies in the Highs group has a significant positive relationship with the intensity of current government subsidies, the firm’s asset growth capacity and profitability; the intensity of prior government subsidies in the Lows group only has a significant positive impact on the asset growth capacity in the current period. In addition, the interaction between the three core variables in the Highs group is also significantly higher than that in the Lows group. This indicates that the government should implement differential policies and financial subsidies according to the actual needs of enterprises to maximize the effect of capital use and promote the development and growth of emerging enterprises.

Suggested Citation

  • Lixia Chen & Jianyuan Huang, 2023. "Study on the Interaction Effect between the Intensity of Government Low-Carbon Subsidies and the Growth Ability of Green and Low-Carbon Emerging Enterprises," IJERPH, MDPI, vol. 20(3), pages 1-17, January.
    • Handle: RePEc:gam:jijerp:v:20:y:2023:i:3:p:2438-:d:1051057
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    References listed on IDEAS

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