The Feedback Mechanism Of International Trade To Financial Development

Financial reform and optimize the trade structure is two hot issues in current Chinese economy. Its essence is to promote the development of China’s financial sector and expansion the export of high value-added products represented by high-tech productions. Numerous literature had proved theoretically and empirically that in open conditions, a country’s exports of manufactured goods will be a source of financial development due to its demand for external financing. Considered that compared to the general industry sector, high-tech industry has a greater dependence for external financing, this paper think that the exports of high-tech products will stimulate the development of finance sector.Use the1998-2007panel data of29provinces, this paper empirically examined whether the high-tech exports of different provinces have a positive influence to its financial development. Through comprehensive survey of aggregate exports, exports of industrial products, high-tech exports in all the provinces, eastern provinces, central and western provinces respectively. Estimation results show that compared to the aggregate exports and manufactured goods export, regional exports of high-tech products has more positive impact to the development of regional finance. At the same time, using three types of comparative advantage index to examination the influence Above-mentioned From another point of view, Estimation results also confirmed that the regional comparative advantage of high-tech industry can stimulate regional financial development.