The Impact Of Financial Development On The Fluctuation Of Manufacturing Performance

Since the Reform and Opening up,China's financial industry has undergone a series of reforms and developments.Studies have shown that the development of financial industry will play a catalyst role in a country's manufacturing industry and be closely related to manufacturing performance.Besides,the fluctuation of manufacturing performance in a country is an important source of economic fluctuations.In order to theoretically clarify the channel of financial industry's influence on manufacturing performance and give steady and credible empirical evidence,to evaluate the potential impact of China's financial market-oriented reforms and to determine the potential impact of manufacturing upgrading through financial development strategic road,this paper comprehensively analyzes the impact of financial development on manufacturing performance based on transnational perspectives.In theory,it depicts the financial growth and financial volatility through the static investment effect and dynamic resource allocation effect on manufacturing performance fluctuations.Based on the global financial development data provided by the World Bank,the financial growth is represented by the growth rate of the financial institutions and the scale,and the financial fluctuations are represented by the growth fluctuation of financial institutions and the growth of scale.This article tests the theoretical hypothesis empirically.This study shows that:First,from a static perspective,financial growth can effectively reduce manufacturing performance fluctuations through investment effects with a constant relationship among sectors.From a dynamic perspective,financial growth can optimize the allocation of resources among industries,promote the structural adjustment of the industrial structure to the benchmark industry,and effectively reduce the manufacturing performance fluctuations while maintaining the manufacturing performance.Second,from a static perspective,financial volatility has significantly aggravated manufacturing performance volatility by aggravating the volatility of fixed-capital ratio fluctuations in the production of working capital.From a dynamic perspective,financial fluctuations also reduce the efficiency of resource allocation among industries and hinder the adjustment of the manufacturing structure to a low-volatility benchmark structure.Even as manufacturing performance remains generally unchanged,financial volatility can aggravate manufacturing performance.Thirdly,by introducing the industry financial dependence,the research in this paper also shows that the core mechanism of the investment effect and resource allocation effect of financial development is the industry's working capital.Under the investment effect,the financial development has a direct impact on the fluctuation of the circulating capital and the fixed capital ratio in the industrial production,and ultimately affects the performance fluctuation of the manufacturing industry as a whole.The effect of resource allocation affects the allocation of working capital in the industry the industry,thus affecting the input of all production resources in the industry and the inter-industry allocation,resulting in the structural adjustment of industries affecting the fluctuation of manufacturing performance.The research in this paper has combed and explored the relationship between financial development and manufacturing performance from both theoretical and empirical aspects.The conclusion of this paper provides a feasible strategic path for manufacturing upgrading caused by financial development.Especially for the special background of current financial market reform in our country,the conclusion of this paper means that it is necessary to promote financial growth and maintain financial stability.At the same time,attention should be paid to structural readjustment of the manufacturing industry,which not only enables the financial development to make a multiplier effect on the steady growth of manufacturing performance,but also takes into account the growth and volatility of the manufacturing industry itself and the manufacturing industry's level of development.Finally,the government should pay attention to the demand of various industries for circulating capital,try to meet the financing needs through multiple channels,reduce the concentration of production in the industry,effectively reduce the negative impact of financial fluctuations,encourage the adjustment of the industrial structure to a low-volatility benchmark and stabilize the manufacturing performance.