Purpose: The purpose of this paper is to empirically investigate the relationship between government subsidies and research and development (R&D) investment of animal husbandry companies in China. The moderating effects of firm size, debt ratio, and firm profitability on this relationship are also examined. Research design, data and methodology: The analysis is based on 14 animal husbandry companies listed on the Shanghai and Shenzhen stock exchanges over the period of 2012-2016. Data are obtained from the China Stock Market & Accounting Research (CSMAR) database and the RESSET database, and multiple regression analysis is utilized with the aid of Stata. Results: The empirical results show that government subsidies can promote R&D investment of animal husbandry companies in China. In addition, firm size, debt ratio, and firm profitability have positive moderating effects on the relationship between government subsidies and R&D investment. Conclusions: Based on the results, the paper concludes that government subsidies play an important role in the process of R&D of China’s animal husbandry companies. This paper recommends that managers of animal husbandry companies should enhance the utilization efficiency of government subsidies and put great emphasis on R&D investment. The policymakers should implement more incentives to encourage animal husbandry companies to invest more in R&D.

Abstract
1. Introduction
2. Literature Review and HypothesesDevelopment
3. Data and Methodology
    3.1. Sample Selection
    3.2. Variables
    3.3. Models
4. Results
    4.1. Descriptive Statistics
    4.2. Correlation Analysis
    4.3. Regression Results
    4.4. Robustness Check
5. Conclusions
References

• Jian XU(School of Management, Qingdao Agricult ural University, Qingdao, China)
• Jaewoo SIM(Department of Acc ounting, Sangji University, South Korea) Corresponding Author