The use of fiscal and tax policies by the state to reverse the shift of entity enterprises from reality to virtuality is an important lever in building a modern industrial system, and the internal expected performance pressure borne by managers provides a feasible explanation for understanding the impact of national macroeconomic policies on micro enterprise investment behavior. This article uses data from entity listed companies in Shenzhen and Shanghai from 2007 to 2020 to explore in depth the relationship between government subsidies and the transition of enterprises from real to virtual. At the same time, it examines the channel role of internal expected performance pressure faced by managers in this process. Research has found that government subsidies significantly inhibit the transition of enterprises from reality to illusion. Internal expected performance pressure has a significant partial mediating effect between government subsidies and the transition of enterprises from reality to illusion, and this relationship is only significant in non-state-owned enterprises. Further research has found that government subsidies not only constrain enterprises from shifting from reality to virtuality through internal expected performance pressure, but also have a chain like intermediary effect of “government subsidies capital market performance pressure internal expected performance pressure enterprises from reality to virtuality”.