Research On The Impact Of Financial Structure Changes On Economic Growth

Since China's economy entered the new normal in 2012,the over-reliance on the financial structure of Banks has been difficult to adapt to the transformation and upgrading demands of China's economy from medium-high speed development to high-quality development.Since the 19 th National Congress of the COMMUNIST Party of China(CPC),the CPC Central Committee has attached great importance to the "supply-side structural reform of the financial system",stressing that "the structural adjustment and optimization of the financial system should be the focus".In particular,it has explicitly proposed to "promote the healthy and stable development of the multi-tiered capital market and increase the proportion of direct financing,especially equity financing".It can be seen that China's financial system structure upgrading and optimization is imminent.As the internal embodiment of financial sector,financial structure determines financial function and financial efficiency to a certain extent.Different arrangements of financial structure have advantages and disadvantages in terms of savings mobilization,risk diversification and resource allocation,which will directly or indirectly affect economic performance.Throughout the history of world finance,with the improvement of economic growth,the financial structure of all countries has changed from "bank-oriented" to "market-oriented".Then,is the market-oriented financial structure more efficient than the bank-oriented financial structure? How to optimize and adjust a country's financial structure in order to further improve the ability of financial services to the real economy has become an issue of great concern and consensus among scholars.For this,this paper mainly from the "literature basis,theoretical logic,empirical analysis,international experience" four parts of the content of the system.In theory,the financial system is an "allocator" of social resources,whose essence is to serve the development of real economy.In the process of operation,we should not only follow its own unique development laws,but also meet the needs of the development of the real economy.Firstly,by combing and constructing the endogenous growth model of the financial structure of the "three sectors"(real economy,banking system and financial market),the analysis finds that: 1)In economic growth,there exists an optimal financial scale and optimal financial structure,that is,a "non-linear" relationship,and the two are not independent.2)Financial structure optimization has two dynamic evolution paths of market-oriented and bank-oriented;Regardless of the path,the scale of financial intermediation and financial market presents a growth trend,the difference lies in the growth speed.Secondly,under the financial perspective,the analysis found that: Under the transmission mechanism of interest rate mechanism,credit mechanism,asset price mechanism and expectation mechanism,The financial system is a different combination of financing channels through direct financing(financial market)and indirect financing(banking system),giving full play to their respective advantages in financial functions directly affects the conversion efficiency of capital storage,indirectly optimizes the flow and allocation of resources,and thus affects economic growth.Among them,there are differences and complementarities between the banking system and the financial market.Then,from the perspective of entity,the analysis found that: 1)The factor endowment structure of the real economy and the characteristics of financing subjects determine the transformation of the advantageous functions of the financial system and constitute the endogenous driving force of the structural change of the medium and long term financial system.2)The financial structure is not always in the optimal state,but in the process of Pareto improvement,adjustment and optimization,showing a dynamic development trend of "deviation--equilibrium--deviation".In terms of empirical research,three indicators of financial structure-scale,behavior and efficiency are selected from both international and domestic levels.From a dynamic perspective,the relationship between financial structure and economic growth is explored.From the static perspective,the paper selects the level of economic growth and the degree of monetization as the threshold variables to explore the differences in the impact of financial structure on economic growth at different stages.At the same time,by introducing the deep internal characteristics of entity and finance and shadow banking factors,this paper explores how these three factors affect financial structure and economic growth,so as to further enhance the understanding of the internal logic between financial structure and economic growth.Through the above analysis,it is found that the market-oriented development of financial structure will be the development trend of the financial system in the future,presenting a shift from bank-oriented to market-oriented,and playing a more obvious role in economic growth.Among them,the banking industry showed relatively stable growth,while the stock market showed rapid and volatile growth.From the perspective of dynamic empirical analysis,it is found that there is a "non-linear" relationship between financial structure and economic growth.However,whether there is an "inverted U-shaped" relationship between financial structure and economic growth is different at the international and domestic levels.At the international level,there is an "inverted U-shaped" relationship between financial structure and economic growth,which verifies the existence of the optimal financial structure in economic growth and is consistent with theoretical expectations.At the domestic level,there is an "inverted U-shaped" relationship between financial structure-behavior and economic growth,a "U-shaped" relationship between financial structure-scale and economic growth,and a negative correlation between financial structure-efficiency and economic growth.This empirical result may be related to the relatively low level of financial structure development in China.This can be demonstrated by a scatter plot of financial structure and economic growth based on size,behaviour and efficiency,That is,most provinces are concentrated in the lower level of economic growth and lower level of financial structure.The empirical analysis from the static perspective shows that there is a significant threshold effect between financial structure and economic growth.Moreover,the impact of financial structure on economic growth presents the effect of "negative correlation first and positive correlation later" within the threshold estimate.This further verifies that there is a nonlinear relationship between financial structure and economic growth;At the same time,in the adjustment and optimization of financial structure,the level of economic development and the degree of monetization should be fully considered.After further introducing the inherent characteristics of the entity,it is found that the financial structure can promote economic growth by satisfying the financial service demand of industrial structure and technological innovation.And there is an "inverted U-shaped" relationship between financial structure based on size and behavior and economic growth.This research conclusion is consistent with the conclusions of many scholars,and we can basically judge the internal mechanism behind them as follows: With the continuous improvement of economic development level,the structural transformation of market factor endowment,that is,the transformation of industrial structure and the financing demand of enterprises matching product and technical risk,as well as the increasing demand for financing services and risk diversification provided by Chinese-funded municipal sites in the financial system.After introducing the inherent characteristics of finance,it is found that the improvement of bank concentration is conducive to promoting economic growth,but not conducive to the marketization of financial structure;Too high turnover rate of stock market is not conducive to economic growth,but it is helpful to promote the construction of financial structure marketization.By exploring the dynamic relationship among financial structure,shadow banking and economic growth,it is found that there is a long-term equilibrium relationship among financial structure,shadow banking and economic growth,and a closed-loop mechanism is formed among the three,That is,shadow banking ? financial structure ? economic growth ? shadow banking.Shadow banking basically presents a "negative first effect and then positive effect" on financial structure.In other words,short-term fluctuation has a large influence while long-term positive influence gradually approaches 0.At present,the mismatch and imbalance between the service supply of China's financial system and the development demand of the real economy is an important factor that causes the aggravation of market risks and hinders the high-quality development of the economy.According to the above theoretical logic and empirical analysis,to achieve the balanced development of "stable growth and risk prevention",it is necessary to promote the coordinated development of the financial system and the real economy.While promoting the transformation and upgrading of the high-quality development of the real economy,we should also build a structural framework of the financial system that matches it.By systematically sorting out and summarizing the development experience and lessons of the United States,Japan and Germany,this paper proposes relevant policy Suggestions for China's financial reform:On the one hand,we should pay attention to the structure optimization of the "macro-medium-micro" level,and ensure the "stable growth of the real economy";On the other hand,we need to improve the financial legal and regulatory system and keep the bottom line of systemic financial risks.