Study On The Relationship Between The Capital Market And Industrial Structure Adjustment

Economic growth mode transformation and the industrial structureadjustment has always been the strategic direction of the economicdevelopment in our country, therefore a variety of policy tools are neededto realize the great target. Among them, the capital market is an importantarrangement of system. This paper will focus on the theoreticalrelationship between the capital market and the adjustment of industrialstructure and the practice of the relationship in our country. This paperresearches deeply the basic principle, function mechanism, function pathand the external conditions when the capital market promotes industrialstructure adjustment.The theoretical research results show that the function which thecapital market adjusts the industrial structure roots in the nature ofcapital for profit. Capital will spontaneously flow to the industries withhigh profit margin from the industries with low profit margin. The capitalflow leads the industrial structure to adjustment and rationalization.This means that the capital must be allocated through the capital marketwith high efficiency and can flow among industries freely. In other words,there are no industry barriers, such as industry monopoly, administrativebans and so on. In the age of globalization, the capital market must beexoteric and the capital can flow among countries freely.The capital market function and the necessary conditions whichindustrial structure adjustment needs has natural coupling. The couplingdisplays as the followings. The capital market’s financing functionprovides the required funds to adjust the industrial structure. Thecapital market’s function of property right definition provides the basicpremise which guarantees resources to be distributed effectively invarious industries. The capital market’s risk pricing function providesthe basic orientation for the upgrading of the industrial structure. Thecapital market’s liquidity helps promote industrial organizationstructure optimization and the adjustment of the stock of capital.The capital market’s mechanism which optimizes the industrialstructure includes the followings. Firstly, the capital market has effective mechanism which screens potential leading industry candidates.Secondly, the capital market promotes the candidates to become therealistic new leading industries through its inherent financing function.Further the new leading industries promote the economic growth throughthe diffusion effects.To judge quantitatively the current situation how China’s capitalmarket optimized the industrial structure, this paper discusses someimportant themes. The themes include the capital market efficiency ofadjusting the industrial structure, the capital market’s actualcontribution to promoting the economic growth, the actual performance ofadjusting the three times industrial structure by the capital market, theactual performance of adjusting the manufacture industrial structure bythe capital market and so on. The empirical research findings show thatChina’s capital market is lack of efficiency and optimized the industrialstructure little.The empirical research focuses on the actual effect on high-techindustries which the medium-sized and small plate and GEM have. Theresults prove the following propositions. Firstly, the capital market’sfinancing function mechanism is effective. Secondly, compared withtraditional industries of listing companies, the innovative small andmedium-sized companies show higher growth. Thirdly, the capital market’smechanism which offers the risk funds exit passages is effective. Fourthly,small and medium plate and GEM promote the strategic new industries’innovation, growth and profitability obviously. But the scale effect isnot obvious.The structure of the article follows as the followings.The first chapter is the introduction. This chapter introduces theresearch’s background, significance, method and structure.Chapter2is the literature review. Firstly，this chapter reviews theliteratures on relation among the law of industrial structureevolution,the adjustment of industrial structure and economicgrowth.Secondly, this chapter reviews the literatures on the relationbetween the capital market and the industrial structure adjustment.Finally, this chapter reviews the domestic literatures on the relation between the capital market and the industrial structure adjustment.Chapter3discusses the general principle and mechanism which thecapital market adjusts the industrial structure. Firstly, this chapterexpounds the respective theories of the adjustment of industrialstructure and the capital market. Further, this chapter discusses thegeneral principle, function mechanism and function path how the capitalmarket adjusts the industrial structure.Chapter4focuses on the empirical research about the actual effectwhich the capital market adjusted the industrial structure in our country.The empirical research proves the following propositions. The firstproposition is whether China’s capital market adjusted the industrialstructure efficiently. The second proposition is whether China’s capitalmarket promoted the economic growth by optimizing the industrialstructure.The third proposition is whether China’s capital marketoptimized the three times industrial structure of our countryefficiently.Chapter5further focuses on the following propositions. The firstproposition is whether China’s capital market optimized the manufactureindustry. The second proposition is the theoretical and empiricalrelation between the capital market and the real estate industry. Thethird proposition is the theoretical and empirical relation between thecapital market and the finance industry.Chapter6focuses on the relation among the capital market, high andnew technology industry and industrial structure height. This chapter’stask is to prove the proposition whether the capital market can promotethe industrial structure height. Firstly, this chapter researches thetheoretical relation between the medium-sized and small plate and GEM andthe industrial structure height. Secondly, this chapter does furtherempirical research about the capital market’s actual effect on ourcountry’s industrial structure height. Finally, the empiricalrelationship between strategic new industry and the capital market isdiscussed.Chapter7focuses on the relation between the capital market and theadjustment of industrial structure under the condition of the capital market globalization. The essential task is whether the capital marketopening-up can promote our country industrial structure optimization.Firstly, this chapter theoretically expounds the relation between thecapital market opening-up and the industrial structure optimization, thenthis chapter analyses the current situation of China’s capital market’sopening-up and the function on the industrial structure optimization.Chapter8is conclusions and countermeasures. According to thetheoretical and empirical research conclusions, this chapter puts forwardthe corresponding countermeasures which promote China’s capital marketto optimize the industrial structure.