The Effect Of Regional Financial Development On The Industrial Structure

The industrial structure has been adjusted since Chinese reform and opening up.The proportion of agriculture is declining and the proportion of service industry isincreasing. According to international standards, the proportion of secondary industryis high. Especially the industry is in high proportion but low-high-tech inherent. Atthe same time, Chinese regional economy has been gone through unbalanced growth.The impact of the financial development on the industrial structure is differentregionally. Analyze the impact of the finance scale, efficiency and structure on theindustrial structure in country and the east, middle and west, may do some help for thefuture direction of the regional financial development and regional financial policy inorder to better promote the rationalization and upgrading of industrial structure.This paper focuses on how finance affects the industrial structure and thedifferent impacts in three areas of our country. We explore the effect mechanisms andfeatures from three aspects: Physical capital accumulation, Technological advancesand the promotion of the leading industry. Based on the panel fixed effects model, testthe effects of finance scale, efficiency and structure in different areas. Throughanalysis, we got following conclusions: Financial scale and structure have asignificant positive effect in the proportion of the secondary and tertiary industries;financial efficiency has a significantly negative effect. As to the high-class ofindustrial structure, finance development has a significant positive effect. From thestrength of each promotion, the financial structure promotes the rationalization of theindustrial structure more effectively. In different areas the effects are different, the eastis more reliable on finance efficiency, the middle is finance scale and the west isfinance scale and policy-oriented loans.According to the results, it should develop a regional strategy based on thecharacteristics and comparative advantages of each area. The rationalization of theindustrial structure in the east has reached a certain level, but the financial efficiencyis not ideal. Thereby increasing the finance efficiency of the east to better promote the industrial structure of the high-class is necessary. The middle has a financial collapsebecause of lower FIR. Thus it should expand the financial scale to better promote therationalization of the industrial structure. The proportion of long-term loans issignificantly higher in the west, so it should strengthen the policy-oriented investment,optimize investment structure, and to further promote the rationalization of theindustrial structure.