ATJ Asian Tax Journal

Asian Tax Journal

Print ISSN 1738-3323 Online ISSN 2733-9270

The Financial Effect of Government Grant on Social Enterprise

  • Kim Young Kyu Department of Business Administration, Graduate School, The Catholic University of Korea

Asian Tax Journal Vol. 19 No. 6 (2018), pp. 9-32

Abstract

This study tried to analyze the effect of social enterprise government subsidy on the performance of the corporation based on the analysis of the support project provided by the government to the general enterprise. The effect of social enterprise government subsidies on financial performance analysis shows that job subsidies show positive (＋) relationship with financial performance. The results of this study are as follows. First, there is no statistically significant effect of the financial support for professional manpower and business development. Social insurance premiums showed positive (＋) relationship with financial performance. As a result, it can be confirmed that the employment subsidy and the social insurance subsidy have a positive effect on the financial performance of the social enterprise government support type. The contribution of this study is as follows. First, it is confirmed that the government subsidies provided by social enterprise have a positive effect on financial performance. The results of this study suggest that the government subsidy of social enterprise suggests the direction of future government policy to support sustainable growth. Second, it is confirmed that there is a difference in the effect on the financial performance depending on the kind of the government subsidy received by the social enterprise. This suggests implications for considering effective ways of linking government funding to the situation of social enterprise. Thus, this study contributes to the analysis of the effectiveness of government grants on financial performance, which had previously been difficult to confirm, and provided a basis for future policy implications. However, the data limited to the companies participating in the social enterprise management disclosure remains a limitation of this study.

Keywords

  • socialenterprise
  • government grant
  • financial effect

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