An Empirical Study On China's Capital Allocation Efficiency And Trade Openness

With the globalization of world economy accelerated, countries political, economic and cultural exchanges and cooperation become more and more closely, and researchers began to pay attention to the relationship of trade openness and financial development. At the same time, more and more scholars have shifted their theoretical and empirical perspective from the relationship between trade openness or financial development and economic growth to the intuinsic link between the trade openness and financial development. Many studies show that the implementation of trade openness policy can help countries achieve"comparative advantage"and"international division of labor", while financial development can help countries to achieve capital accumulation and increase its capital allocation efficiency. However, there is few research showed that the implementation of openness policy can help promote financial development, especially promote the capital allocation efficiency which is an important indicator to measure financial development. Based on this background, this paper comprehensive analysis and summarized the existing research, and reasonal used the statistical methods to empirical test what improvement the implementation of trade openness policy give effect to the capital allocation efficiency, and hoping bring useful advice for our country's further trade openness reform and financial development.Through theoretical analysis and empirical test, this thesis examines the relationship between implementation of openness policy and our country's capital allocation efficiency. First, we used the theoretical analysis method to derive the transmission through which the trade openness can help promote financial developm ent. Then, we used the panel data model and the improved Wurgler(2000)model to empirical testing the various industries and regions sample data. The results show that with the improvement in the level of China's trade openness, the efficiency of capital allocation has been well improved; trade openness has brought forward a positive role to the capital allocation efficiency, and make it increased with the improved degree of trade openness. Also study further pointed out that although the efficiency of capital allocation in China is gradually increased, but the level is relatively low. this requires our country strengthen its construction and adjust the industrial structure; and then, investment can quickly and effectively into the various industries,at the same time, We should continue to strengthen cooperation and exchanges with other countries, through trade openness, investment and other measures to guide the flow of capital ,and improve the efficiency of capital allocation.