Relationship between government subsidies and audit quality: Unveiling the role of ownership structure

Ze Zhou, Cuifang Yuan, Fei Ren and Pengjia Che

Finance Research Letters, 2025, vol. 71, issue C

Abstract: This study examines the relationship between government subsidies and audit quality using panel data from Chinese A-share listed companies from 2018 to 2022. It further investigates the moderating effects of ownership structure, specifically ownership concentration and institutional ownership. The empirical findings show that government subsidies improve audit quality. However, the higher the ownership concentration, the weaker the positive relationship between government subsidies and audit quality. Furthermore, institutional investors’ relatively high equity holdings reduce the promotional impact of government subsidies on audit quality.

Keywords: Government subsidy; Audit quality; Ownership concentration; Institutional ownership (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:71:y:2025:i:c:s1544612324015174

DOI: 10.1016/j.frl.2024.106488

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