| International trade effect of financial development should be an issue in financial field and closely related with economic development of our country. For the problems in the research on improving the trade generates meaningful impact, so this theme is not only the financial problems, but also related to international trade issues. China's trade, after 30 years of reform and opening-up, now has a considerable scale development, with an annual export having ranked second in the global and only following the United States. Compared with the financial system but not to match with the international trade in China, so we need to improve the financial system and make it into fully and high level in order to adapt to the rapid development of foreign trade. Based on the theory of financial development, on the basis of the review and summarizing the general browse for financial development written by many researchers for correlation between financial development and international trade, it summarizes the conclusion of international trade effects and principle of empirical analysis, and uses linear regression in 1983 to 2008, an empirical analysis of the data. So the financial development of international trade will influence has been verified, and then it can insure that the principle is correct before last. Finally it concludes that the problem should be taken in policy suggestions.This article used" An Empirical Analysis on the Influence of China's Financial Development to the International Trade" to be the theme, and the article is divided into four parts.The first part of the theory on financial development process are briefly reviewed, and then it introduces various financial development and international trade relation theories. Financial development theory was founded by McKinnon, pointing out the financial deepening is the main content of financial development, and it can be used as one of the comparative advantage of international trade. After that many scholars studied the relation between them. The first research was made by Bandhan Kletzer and H-O, a theoretical model that can get the credit of the financial advantage, so it also determines the country's trade advantage. In the fluidity of currency to study relationship between the two ones, Gertler and other ones concluded that liquidity may affect the speed of production of enterprises, which affects the country's exports. In the exchange rate, Arize thought that the increased exchange rate fluctuations is unfavorable and gets negative effects to exports. Overseas financial development in technical ways to influence international trade, Rajian was studying out such conclusion that technological progress is the main reason why financial impacts trade, so technology changes production structural. The difference on structure changes financial needs, and financial development will help to technology intensive industry development. Thus this changes the structure of export trade. Domestic researcher JiJunYan had introduced the theory of financial development, HO model, can improve financial development mentioned resource endowment and technical advantage, and optimize the trade structure and international trade. XuJianJun comprehensively analysed the financial development factors of influence of international trade and worked out the measurement data analysis of our land from 1978 to 2005. The research in this field has been explained this proposition is not new, but it is very promising. in the relationship of financial and trade the direction and breadth are growing more. Because the valued selection of the data in China's is only since reform and opening up years, it makes less empirical value innovation. Although many ones have slightly different research methods, the conclusions from scholars are totally same as others.The second part is discussed on analysis of the principle how financial development effects international trade. First, since the reform and opening in China the financial system progress is introduced, the changed process of financial system now complete system structure and scale, characteristics and what shortage. Second, begin to discuss the development of international trade and financial impact of specific aspects:The first, about financial services to meet the trade needs reasons, that can be good financial services, and financial development can satisfy all the needs of volatile trade in services, and also can reduce trade risk factors; The second, to improve the structure of export trade of production, the finance may support the best production by the investment, and technology-intensive industries will get more financial support, so the improvement of technology from financial support can change the structure of export products; The third, financial development can impact the trade pattern, and financial development is one of comparative advantages in a trade in a country, which has economies of scale in industrial cluster with a good financial system, so more development can be made on trade pattern; The fourth, financial development can improve trade liberalization, for good and developed financial system can promote foreign trade policy, and thus be fine to global trade liberalization.The third part is the theme of this empirical analysis. For financial development index selection, this paper uses the FIR, namely the total financial assets than all the GDP, to represent the financial development scale change; With the development of finance to represent SLR efficiency, the total amount of financial institutions loan than deposit; With the development of finance to represent FO international payments, namely open capital account balance of total exterior-interior relationship than GDP; Using r of financial development to represent the size of financial risk, namely the risks of total loans divided by GDP growth rate; Trade index uses two character that TO represents the scale of trade, and TCS structure. Through empirical analysis from 1983 to 2008, a total of 26 years of financial and trade data is through a linear regression model analysis. Through the simple hypothesis, and then the stationarity test on data, the conclusion is data is flat. Repassing cointegration test, cointegration relation, impulse response analysis and variance decomposition, financial and trade indexes have the long-run equilibrium relationship, and the relationship between each variable structure changes.The fourth part is the conclusion and policy recommendations. First is the result that financial development impacts foreign trade openness. That there is a long-term equilibrium relationship between them, and financial development scale, efficiency and openness factors can promote trade openness. Big risk in the short term will expand trade, but the later effect is negative. Due to the shortage of financial system and development, financial openness has little influence to trade. Second is the financial development of international trade structure, and there is a long-term equilibrium relationship between the variables. When the long-term equilibrium relationship is made, financial scale and financial openness may improve our country's international trade structure, but financial efficiency and financial risk restrain trade structure. Financial unstable efficiency is due to the low China's financial efficiency, and the immature financial system. Risk factors to structure upgrade of export products have a bad effect, but it is not obvious. Finally, policy suggestions including to promote financial system to market-orientation, to promote the development of efficient operation of financial institutions, to broaden the financing channels and to strengthen the supervision to financial system risk, covers from macrocosmic to microcosmic, from the government to the behavior of the individual standards and norms, summarizes the whole classes of society request to improve relations between financial and trade. |
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