Resources Science ›› 2018, Vol. 40 ›› Issue (11): 2280-2296.doi: 10.18402/resci.2018.11.14

• Orginal Article • Previous Articles     Next Articles

Government subsidies and productivity of resource recycling enterprises —— an empirical study on panel threshold effect of listed enterprises in China

Hailin YAO1,2(), Ruokang JIA1()   

  1. 1. Business School, Central South University, Changsha 410083, China
    2. Institute of Metal Resources Strategy, Central South University, Changsha 410083, China
  • Received:2018-05-30 Revised:2018-08-30 Online:2018-11-20 Published:2018-11-12

Abstract:

At present, China is facing a severe resource and environment problem. In order to solve the increasingly dual constraints of resource and environment, the Chinese government had invested a large amount of subsidies to promote the development of resource recycling industry. According to previous studies, subsidy was a "double-edged sword, " on which the impact was associated with uncertainty. In order to explore the impact of government subsidies on the production efficiency of resource recycling enterprises, this investigation used the panel data of 51 listed enterprises in China from 2012 to 2016 to characterize the impact of subsidies on total factor productivity (TFP) at a micro level by using fixed effect model and threshold panel model. It concluded that government subsidies have a nonlinear effect on TFP. Furthermore, there is a threshold effect of subsidies on TFP, which is closely related to the subsidy intensity. Subsidies did show a promoting effect in the (1.5%, 1.6%] interval, with an ineffective impact within the range (1.6%, 2.7%], and an inhibitory effect when the subsidies are greater than 2.7%. Further intrinsic mechanism analysis demonstrated that the subsidies stimulated enterprises' R&D investment during the promotion phase and increased enterprises' rent-seeking costs during the inhibition phase. It is noted that the advisable suggestion for upgrading the current development of the resource recycling industry was initiated. We assume that this will provide a valuable reference for the adjustment of subsidy policy and the development of resource recycling industry in China.

Key words: resource recycling, government subsidies, TFP, threshold effect