The Study On Financial System Supporting Science-technology Innovation Of BRICS

The BRICS countries have become the leading representatives of today’s emerging economies due to their out-standing performance for the first decade of the21st century and have also become the engine for pulling the world’s economy. However during recent years, the economic growth of the BRICS countries have declined and the overall performance has not been very satisfactory. Besides the difficulty on global economic recovery and the poor external environment, the main reasons for such causes might due to the limitations of its own growth potential, severe unreasonable economic structure, and the resulting internal economic vulnerability and instability. At present, it is essential that the BRICS maintain its growth stability through the development of innovation and the transformation of the economic growth mode. The financial capital always plays an important role in the process of the innovative technology’s growth, development, and eventually forming the dominant paradigm for economic growth. In another word, scientific and technological innovation relies on stable financial supply and an effective financial system can gather fund and allocate it into the most competitive entities.The BRICS governments have formed a financial supporting system for science-technology innovation, which the government acts as leading role and the other financial departments as supplements. It relies on increasing financial funds input and strengthening financial supporting policies to compensate the "Macmillan Lack" of science and technology innovation. However, excessive government intervention usually might withhold the effect of spontaneous adjustment of the market and the financial supporting system for technological innovation is not quite effective. Therefore, it is very illustrative to study the financial supporting system in BRICS countries for science-technology innovation. It can not only help to make a preliminary conclusion on the effect and results of such system, but also can provide reference for China’s financial supporting system of science-technology innovation through analyzing the factors affected the BRICS countries’ financial system supporting science-technology innovation. Meanwhile, it will provide theoretical basis for other developing countries for their science-technology innovation through financial means and for the economic growth.There are six chapters in this paper as following:Chapter I:the introduction. It briefly describes the research background, the research significance, and the outline and content of the paper through reviewing the relevant financial support for science-technology innovation inside or outside the BRICS countries.Chapter Ⅱ:it explores the action mechanism of the financial system supporting the science-technology innovation. First of all, it analyzes the necessity of government supporting the science-technology innovation due to their basic attributes. Secondly, it discusses the financial repression and other issues in the process of financial supporting science-technology innovation in developing countries. Finally, it analyzes the effects of different supporting supplies to science-technology innovation under the effective financial supporting system.Chapter Ⅲ:it illustrates the evolution and characteristics of the financial system supporting science-technology innovation of BRICS. It briefly summarizes the background of financial supporting system in five BRICS countries. Secondly, it analyzes and summarizes the characteristics of financial supporting system for science-technology innovation for those five BRICS countries through four supply layers as government, financial intermediation, entrepreneurial venture capital investment, and the multi-level capital market.Chapter Ⅳ:it is about the comparison of the financial supporting system for science-technology innovation among the BRICS countries. Firstly, it compares the effects, intensity, means and methods of government implementing financial support for science-technology innovation. Secondly, it compares the main structure, the degree of participation and the ability of the main supply and demand subjects within the financial system supporting science-technology innovation. Thirdly, it compares the effect of financial supporting for science-technology innovation. Eventually, it outlines the issues of BRICS countries’financial system supporting scientific and technological innovation based on horizontal and vertical comparison of results.Chapter Ⅴ:it provides suggestions on promotion of financial system supporting science-technology innovation in China. Based on the previous theoretical study and analysis, this chapter firstly illustrates the idea, overall structure, and the principle for the optimization of China’s science-technology innovation system. Moreover, it provides policy recommendations according to the financial system supporting science-technology innovation in various supply subject status. Chapter Ⅵ:the conclusion. It summarizes the overall results and opinions for the entire paper.The innovation of this paper is from the research perspective and the research objects.Firstly, it is the research perspective. It is quite difficult to determine which financial sector is more conductive to the promotion of science and technology enterprise development based on the existing research on high-tech enterprise unilateral demand. In this paper, the analysis provides basis and foundations for finding optimal path mainstay of supply and demand from two perspectives as the main characteristics of financial market demand subjects and the function of the main supply subject.It analyzes the financial needs under market mechanism in different life cycle. It also discusses the advantages and disadvantages of mechanism and methods of different financial sectors in reserve mobilization, risk diversification, and fund distribution.The second is the research objects. Most of the research objects in the existing studies are developed countries and regions. Although in recent years related research on the effects of specific financial sectors in BRICS countries appeared, it is relatively rare taking the five BRICS countries as a whole to study. In this paper, the BRICS as the object of the study, it not only can help China obtain inspiration for the optimization of financial system supporting technology innovation; it also provides general experience and theoretical conclusion about supporting the technology innovation by financial instruments in the developing countries.Due to the limitations in the basic theoretical knowledge and research capacity, there are some shortcomings and weaknesses in this paper. Firstly, it lacks quantitative analysis to test the result. Due to the limited availability of micro data about BRICS enterprises, the study is short of empirical test for the effect of the national financial system supporting science-technology innovation. Secondly, it lacks more comprehensive in-depth theoretical analysis. The study on financial supporting system for technological innovation in developing countries requires knowledge on macroscopic, microcosmic economics, finance, management science, Marx’s political economics theory and etc. The financial system supporting scientific and technological innovation is also a systematic and complex research field. The thesis in this paper is only a general analysis and discussion based on previous studies. Therefore some opinions and understanding might be naive and childish.