Research On The Impact Of China's Economic Financialization On The Real Economy

The current economic development of our country clearly shows the phenomenon of " Tranforming the economy from substantial to fictitious”.On the one hand,the financial sector has attracted a large number of speculative investors due to its advantages such as high returns and fast return of funds,which has led to a selfcirculation of development,and problems such as high asset prices and high leverage within the sector have led to a serious departure from the basic function of serving the real economy.On the other hand,due to the serious problems of overcapacity,lack of product innovation,production efficiency and low profit,the physical sector's lack of development momentum puts it at a disadvantage in the competition.As the development of finance and the real economy continues to deviate,China has begun to pay attention to the relationship between the two and promote the return of finance to the real economy by promoting the reform and opening up of the financial industry and implementing supply-side structural reforms.Since the outbreak of the new crown pneumonia epidemic,the development of the real economy has increased additional costs on the basis of bearing the original burden.In the process of coordinating the prevention and control of the epidemic,the focus of financial services for the real economy is to make up for the shortcomings of the problems exposed in the epidemic.China needs to further increase the implementation of macroeconomic policies to promote the resumption of work and production in an orderly manner,and put support for the recovery and development of the real economy in a more prominent position.Based on this,this paper focuses on analyzing the impact of economic financialization on the real economy.The main contents of this research are as follows:First,on the basis of sorting out relevant literature and summarizing relevant theories,on the one hand,this paper analyzes the mechanism by which financialization affects the real economy and the financialization of non-financial enterprises affect industrial investment from the perspectives of promotion and suppression.On the other hand,this paper constructs a comprehensive index of static and dynamic weights to accurately measure financialization,and applies the MS-AR model to the volatility characteristics of the index.Financialization is mainly at a low level,and real economic growth has inertia.Second,this paper uses Lasso regression to screen the factors which have an impact on the real economy,and uses 2012 as the node to analyze the effects of financialization in different stages.The results of the full sample show that financialization is manifested as restraining the real economy,while the phased results are shown as the impact of financialization from negative to positive,indicating that the financial support of the real economy has achieved results.This paper further analyzes the construction of the MS-VAR model based on the variables selected by the Lasso regression and finds that,compared with low-level financialization,moderate financialization promotes the real economy stronger and lasts longer.The impact of excessive financialization will play a restraining role in the short term(6 months),and will play a promoting role after the optimal allocation of financial resources over time.Third,this paper uses the panel threshold model to analyze the threshold effect of financialization and finds that introduced foreign investment appropriately can integrate local financial resources and jointly play a role in promoting the growth of the real economy.However,the ever-increasing foreign investment will exert a squeeze effect due to competition with local resources,and will play a restraining effect when the total capital scale exceeds the absorption capacity of the local financial market.This paper incorporates the selected spatial temporal weight matrixs into the spatial panel model to analyze the spatial spillover effect and finds that the direct and indirect effects of financialization on the real economy are both positive,which can improve the growth of the real economy in this region and neighboring regions.Fourth,the results of a high-dimensional panel model that simultaneously controls the fixed effects of provinces,time,and industries show that the financialization of nonfinancial companies inhibits industrial investment,while the model that introduces the square term finds that the relationship between the two is mainly located on the left side of the "U-shaped" curve,so that the restraining influence of financialization dominates.Supplementary analysis finds that the inhibitory effect of financialization on industrial investment differs due to the nature of enterprise property rights,macroeconomic policies,and the classification of enterprise scale.Finally,this article summarizes the important conclusions of the empirical analysis and and puts forward policy recommendations from the perspectives of facilitating micro-enterprises production and operation,promoting regional coordinated development,and strengthening financial support for the development of the real economy.The main contributions are as follows:First,due to the single indicator cannot accurately and comprehensively measure the level of financialization,this paper selects indicators from different financial submarkets,and uses the impulse response results of the SVAR and TVP-VAR models to calculate static and dynamic weights,and further assigns weights to sub-indicators to obtain the comprehensive indicator.This indicator which has a higher measurement accuracy is more sensitive to economic shocks and the impact of macro policies.Second,existing studies have used stepwise regression to determine the influencing factors included in the model.This paer uses Lasso compression estimation not only can solve the problem of collinearity between variables effectively,but also simplify the model by screening variables.The cross-validation method filters out some factors that have little impact on the real economy by imposing constraints on the coefficients in the model,and compresses the coefficients of the corresponding variables to zero.At the same time,the LARS can sort the influencing factors and screen the factors according to the results of the optimal step.Third,due to the shortcomings of the traditional time weight matrix,this paper uses the global Moran index to calculate the time weight matrix,which can not only reflect the influence of previous periods on the current period,but also reflect the trend of decreasing influence over time.Differing from previous studies comparing different types of spatial temporal weight matrixs under the same space model,this paper uses the time weight matrix multiplied by the space weight matrix(Kronecker product)to obtain the spatial temporal weight matrix,and compares the effective correlation between the spatial temporal weight matrix and the explained variable matrix to determine the optimal weight.Fourth,the traditional panel measurement model is limited in its application,so that this paper analyzes the heterogeneity of the impact of financialization by constructing a high-dimensional panel model which controls the fixed effects of individuals,industries,and provinces simultaneously.In order to overcome the shortcomings of group regression coefficients that are not comparable,this paper adds the coefficient difference test of group regression,and introduces a cross-multiplication term in the model to reflect the difference of estimated coefficients between different groups.