Do governmental subsidies improve the financial performance of China's new energy power generation enterprises?

Supported by preferential policies and governmental funding, the development scale of China's new energy power generation industry has been improved greatly.As a capital-intensive practice, what is the impact of governmental subsidies on the financial performance of China's new energy power generation enterprises in recent years? Will technological innovation improve the financial performance of enterprises? These questions are of great significance to the government and enterprises. However, empirical researches on these issues are relatively less. Based on the data of 158 listed new energy power generation companies in China from the past decade, this paper measures the impact of governmental subsidies on financial performance at the microscopic level. In addition, the impact of technological innovation on financial performance is also evaluated. The research results show that: first, governmental subsidies have a negative impact on the short-term financial performance of new energy power generation enterprises, and have a positive impact on their long-term financial performance; second, the technological innovation subsidy has a single threshold effect on the short-term financial performance of new energy power generation enterprises; and third, there are differences between supportive subsidy and technological innovation subsidy on the financial performance of new energy power generation enterprises. (c) 2021 Elsevier Ltd. All rights reserved.