Abstract: Due to the inevitability of market failure, government subsidies have become an important means to ease financing constraints and improve financing efficiency of small and medium-sized enterprises(SMEs) in recent years, but there is still a lack of in-depth discussion on its mechanism. In this paper, 4543 listed companies in China′s SMEs and GEM from 2007 to 2016 are selected as samples to empirically test the impact of government subsidies on SME financing constraints and the mechanism. Heterogeneity analysis is carried out from the dimensions of enterprise life cycle, ownership type and operation status.The results show that: government subsidies such as fiscal subsidies and tax incentives are conducive to alleviating the financing constraints of SMEs; there are significant differences in the effects of fiscal subsidies and tax incentives; SMEs with growth stage, low degree of nationalization and poor performance are facing more significant financing pressure, and the effect of government subsidies is the most significant; government subsidies have a certain signaling effect, which is conducive to eliminating the information asymmetry between the supply and demand sides of funds and improving the external financing capacity of small and medium-sized enterprises. Based on this, this paper puts forward policy enlightenment to ease the financing constraints of SMEs from the aspects of increasing government subsidies, implementing policies for enterprises and further exerting signaling mechanism.

Key words: financing constraints of small and medium-sized enterprises, government subsidies, financial subsidies, tax incentives, enterprise life cycle