Fiscal Decentralization,Corporate Rent-seeking and Local Government Grants and Subsidies:Evidence from Chinese Capital Market

This paper analyzes the relationship between fiscal decentralization,corporate rent-seeking and local government grants and subsidies based on the data of A-share listed companies from 2007 to 2009.It reaches the following conclusions: firstly,on the whole,in regions with higher degrees of fiscal decentralization,governments provide fewer grants and subsidies for the companies whose rent-seeking is conducive to getting government grants and subsidies;secondly,with regard to ownership,in regions with higher degrees of fiscal decentralization,governments provide more grants and subsidies for state-owned enterprises and fewer for private enterprises,showing that there is ownership discrimination in regard to government grants and subsidies,and the problem about soft budget constraints of state-owned enterprises is still prominent.Therefore,it is a tough and long-term task to set up the institutional environment with fair competition and mutual development of different ownership economies.