The Impact Of The Financial Development Of China's Total Factor Productivity Growth: Mechanism And Empirical Analysis

Accelerating shift in economic development mode and Deepening the financial system reform have become two big economic hot problems in today's China. On the one hand, The change of total factor productivity and the mechanisms through which total factor productivity growth takes place, become two key elements which are important to understand China's internal growth force and the transformation of economic development mode. On the other hand, financial sector has become a pillar industry of China's modern service industries, and plays an important role in the national economy. In this context, the influences of financial development on China's total factor productivity growth and the mechanisms through which these influences take place are not only an issue in relation to China's sustainable macroeconomic development, but aslo is an new important theoretical proposition. Therefore, investigating deeply the influences of financial development on China's total factor productivity growth and the mechanisms through which these influences take place, has important theoretical and practical significance.The international academic research on the effects of financial development on economic growth have started earlier,and have formed a relatively mature theoretical system. However, in view of China's unique realistic national conditions, foreign existing research results cannot be completely suitable for analysing the situation in China. Since scholars generally view that improving total factor productivity growth is a key factor which guarantees of future economic growth of China, whether financial development contributes to promote China's total factor productivity growth? If financial development has significant influences on China's total factor productivity growth, so how to identify the channels and mechanisms through which these influences take place? What roles does financial development play in international trade's andFDI's technology spillovers effect? From the perspective of financial development, how to formulate specific and feasible Policies for promoting China's total factor productivity sustainable growth. Basing on relevant frontier research results, this paper adopts research methods which are combined with theoretical model analysis, empirical research and normative analysis, answering these important issues systematically and depthly. Ours research's main conclusions are as follows:Theoretical research results show that: (1)Developing and perfecting China's financial markets has positive productivity growth effects. Underdeveloped financial markets can promote achieving China's total factor productivity growth in a higher steady-state level through the " Learning by doing" productivity growth mechanism as well as the "independent research and development" technology progress mechanism. (2)Improving China's financial development level is an important factor which achieves international trade's productivity growth mechanism. Improving the financial development level is conducive to generating benign interaction mechanism between financial sector and trade openness, strengthening international trade's positive role in promoting foreign advanced technology's transfering. (3)Underdeveloped financial system can improve domestic country's absorption ability of FDI's technology spillovers. Coordinating development between the domestic financial system and FDI can strengthens FDI's technology spillover effect, achieving total factor productivity growth.The empirical research shows that: (1)In China, from the perspective of optimizing the allocation of resources, the bank credit has more economic efficiency relative to fiscal appropriation. Bank loan which gradually replaces the fiscal appropriation, becomes an important source of investment funds, improving resources use's efficiency, pushing the total factor productivity growth. (2)Urban and rural residents savings is an important source in which Chinese small and medium-sized enterprises gain informal financing. Thus Financial institutions's function: savings mobilization, helps non-state-owned enterprises with higher productivity to gain more financial resources. (3)Whether the financial system can promote productivity growth through resource allocation, risk diversification etc. financial function, depending on not only the size of the financial development's scale, but also depending on whether financial structure matches economic development intrinsic demand. Financial structure's optimization can help improving China's total factor productivity. (4)Financial development is playing an important role in promoting international trade's and FDI's technology spillovers effect. Financial development makes China can absorb international trade's and FDI's technology spillovers more fully, enlarging opening to the outside world's positive effects on productivity growth.Based on the research conclusions in full text, combining the realistic backgrounds of China's economic operation, focusing on how to effectively improve China's total factor productivity growth, this paper puts forward some concrete and feasible policy recommendations from the aspects of deepening financial reform in China, increasing manpower capital investment, transformation of foreign trade growth mode and strengthening FDI's technology spillover effect.