A Research On The Relationship Between Regional Financial Structure Adjustment And Industrial Structure Upgrading

To be the core of the modern economy, Finance connects all aspects of social economy and people's life. Finance provides industry departments with financial assistance by its financing function, and transfers money from the sunset industries and inferior industries into the emerging industries and superior industries by its resource allocating function, which brings about an optimization and upgrading to industrial structure. The improvement of finance which is a member of the tertiary industry will promote the development of tertiary industry. Therefore, there is a certain connection between financial development and industrial structure adjustment. Financial development has played an important role in industrial restructuring.China is a developing country that its regional economic development is extremely imbalanced. Owing to the strong externalities of finance, its development is closely related to the national economic development and social stability. Concerning on the gap of economic and social development and even the political issues, we must pay great attention to the regional financial development disparities. Dividing our country into three areas: the eastern region, the central region and the western region, and then adapting both theoretical and empirical research methods to analyze the relationship between financial structure adjustment and industrial upgrading in each region, at last advancing advices to adjust and optimize financial and industrial structure for each region, which will not only further enrich the research achievement regarding financial development and economic growth, but also help to reduce the gap of regional economic development, finally make regional economies develop coordinately.In this paper, firstly the domestic and foreign researches related to financial development affects industrial structure updating are briefly reviewed, and then a theory frame of the interaction between financial structure adjusting and industrial structure updating is established on the basis of these researches. Secondly, compares the current situation of eastern, central, western region's financial and industrial structure, and constructs proper variables of financial structure adjustment and industrial structure updating, uses a unit root, cointegration test and granger causality test to analyze the mutual relations between financial structure adjustment and industrial structure updating in the eastern, central and western region respectively from two sides: the development of the banking intermediaries and the capital markets, and we come to a conclusion that our eastern, central and western region's finance has been developing distortedly so that it hasn't played a role in the updating of industrial structure. Lastly, some advises are advanced to adjust and optimize regional financial structure and industrial structure according to the empirical conclusion.