The Study Of Financial Innovation To Support Economic Restructuring

Since the post-crisis era, seeking the quality of economic growth and sustainable development has become the common aspiration of the world’s major economies. The developed countries and emerging market economies’ series arrangements of innovation’s field, is indicating that the world economy is on the threshold of the phase of economic structural adjustment, which is characterized by intensive innovation and industry promotion. Facing the complicated domestic and international environment of the post-crisis era, accelerating the change of China’s economic development pattern and restructuring of economy, and attacking to the high-end of global industrial chain consciously, have been the consensus of the Chinese government, theorists, practitioners. Since 2006, Tianjin Binhai New Area became a national comprehensive reform pilot area, Tianjin has been entrusted with the important task of a third engine of economic growth. The central government hopes Tianjin could play an exemplary role in the transformation of development mode and adjustment of the economic structure. In recent years, the financial reform and innovation of Tianjin, which is an important part of comprehensive reform pilot, has a great development. Financial innovation to support the Tianjin economic structural adjustment, not only conforms to the trend of the financial support for the development of the real economy, but also conducive to the practice requirements of innovation-driven, endogenous growth in Tianjin. From the experience of developed economies, one important reason of great development of science and technology in the 1990s, is that the financial market depth and complexity in the developed economies (especially the United States). There is some inspiration for financial innovation to support the Tianjin Economic structural adjustment.Combing classic literatures and the theories of financial innovation to support economic restructuring, the paper analyzed present situations of the economic structural adjustment, financial reform, and financial innovation to support economic restructuring in Tianjin. It analyzed the motivation mechanism of Tianjin economic structure adjustment by the principles of technical economics, and tried to build competitiveness index system of financial innovation which quantitative assessment of the status of the Tianjin financial reform and innovation, and expounded the effectiveness and the potential problems of financial innovation to support the Tianjin Economic structural adjustment. Then, this paper reviewed of the experience of financial innovation to support economic restructuring in two major economies of the United States and Brazil, and in two small economies of China Taiwan area and Hong Kong SAR, which provided the empirical evidence for Tianjin financial innovation to support economic structural adjustment.Since then, the paper constructed a model of endogenous economic growth, which is implanted of financial innovation activities. The paper did theoretical analysis of financial innovation to support economic restructuring. It focus on the internal mechanisms and characteristics of two innovative financing activities (financing of private equity funds and financing of enterprises listing) to promote technological progress and capital accumulation, and thus to support the economic structural adjustment. It demonstrated that it is reasonable to support the regional economic structure adjustment by financial innovation. Then, this paper did empirical study of the impact of financial innovation to Tianjin economic structural adjustment by econometric models. It first of all defined of financial indicators that reflect the level of financial innovation, then, analyzed the long-term and short-term relationship between the relevant variables of Tianjin financial innovation and the economic restructuring in the past 30 years by (non-structural) VAR model. It found that financial innovation has a significant impact on economic structural adjustment. Then, it used the ARMA model to predict the trend of the share of financial value added in the GDP of Tianjin during the 12th Five-Year. It measured the direct impact on the economic structure of the innovation and development of the financial industry.Finally, based on the conclusions of the International Experience, theoretical and empirical analysis, this paper set the functional orientation of financial innovation to support economic restructuring functions in the strategic level, which means that financial innovation should play a dual function to promote the development of regional innovation and R & D base and to the support the development of modern service industry, then the financial innovation could support the Tianjin economic structural adjustment. At the same time, this paper provided the policy recommendations of the Tianjin financial innovation to support economic restructuring from the basic conditions, support channels, areas of focus and financial ecology.