Abstract: As a macro-control means of economic intervention by the government, can government subsidies effectively guide enterprises’ industrial investment and further restrain the phenomenon of “separated from the real economy” characterized by enterprise financialization? Taking A-share listed companies in Shanghai Stock Exchange and Shenzhen Stock Exchange from 2009 to 2019 as samples, the impact of government subsidies on financialization of micro enterprises is explored The empirical results show that government subsidies can restrain the investment behavior of financial assets In terms of transmission mechanism, government subsidies can help promote fixed asset investment and R&D innovation investment of enterprises, thus affecting the allocation of financial assets of enterprises Further analysis shows that government subsidies have a stronger restraining effect on the financial investment behavior of non-state-owned enterprises and enterprises with high financing constraints This study proves the positive role of government intervention in the direction of enterprise’s asset allocation, and is of great significance to further optimization of industrial policy design in China to enhance “finance serves real economy” and promote high-quality development of entity enterprises.

Key words: government subsidies, financialization, R&D investment, capital investment, government intervention