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Product Market Competition, Marketization, and Government Subsidy
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TitleProduct Market Competition, Marketization, and Government Subsidy  
AuthorKong Dongmin,Wang Yanan and Liu Shasha  
OrganizationDepartment of Finance, Huazhong University of Science and Technology;Department of Finance, Peking University;; 
Key WordsIndustry Competition; Marketization; Government Subsidy 
Abstract Aimed at the issue of government subsidy that has attracted extensive attention recently, this paper studies the effects of product market competition, marketization course, and different enterprise ownership on government Subsidy. We show that: Firstly, the loss-making enterprises generally obtain more subsidies, and the state-owned enterprises do obtain more subsidies than the private enterprises facing the same losses. Secondly, the increasing competition of the products market leads to the fact that state-owned enterprises obtain more government subsidies. Thirdly, with the promoting of marketization degree, the state-owned enterprises, especially local state-owned enterprises, obtain more government subsidies. Finally, further results find that in order to obtain more subsidies, the state-owned enterprises rather than private enterprises tend to augment losses by manipulating accounting earning. Generally, this study offers timely and clearly political suggestion for the regulatory authorities, which contributes to the issue of targeted acts against the questions of government Subsidy from both home and abroad. 
Serial NumberWP348 
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