Government Subsidies, Life Cycle and Firm Value of Science and Technology Service Industry

Abstract:

Using the samples of listed companies of science and technology service industry from 2009 to 2014, we empirically study the influence of government subsidies in different life-cycle stage decided by cash-flow method to firm value. We have found that: the scale of government subsidy shows a decreasing trend in the evolution of the corporate life-cycle; In the mature stage and decline stage of S&T service enterprises there are subsidies over and the problem of insufficient subsidies. Therefore, we recommend respectively lowering and improving the scale of subsidies to those companies to optimize the efficiency of resource allocation the subsidies, and thus to promote the development of S&T service industry.