Research On The Support Mechanism And Efficiency Of Financial System On Technological Innovation In Zhejiang Province

The high-tech industry is knowledge-intensive, technology-intensive industry.The development of high-tech industry can not only influence efficiency of the wholeindustries of our country, and also promote the industry level and increase speed andquality the economy. As the source of power of the high-tech industry development,technology innovation is the future potential point and area of economy growing.Technology innovation is also the strategy key point of competition between countries.Technology development and innovation are core competitiveness of country andimportant approaches of the transformation of economic growth mode and sustainableeconomic development. Chinese government has made the strategy of technologydevelopment and innovation as the guiding ideology of the “Twelfth Five Year Plan”.As a developed province in east area of China, Zhejiang must rely on technologyinnovation to cast off the decline of traditional industry and keep the high speed ofeconomic growth.As the basic factor of production, capital can bring residual value and excesssurplus value. Capital is the necessary inputs of economy and technology innovation.The innovation activities of high-tech industry need large amount of Science andtechnology funds. Innovation activities are high-risk, large-investment and chronic, soit is hard for innovation project to get large amount of money. Only an efficient andprefect financial system can support high-tech innovation, otherwise technologyinnovation will be obstructed. Analyzing the effect and efficiency of financial systemon technological innovation, can help us find the shortages of the support of financialsystem on technological innovation. The enlargement of financial support approachesand the improvement of financial support efficiency can advance the supportmechanism of financial system on technological innovation. Based on financialdevelopment theory, innovation theory, enterprise life cycle theory and industryrelevance theory, we take Zhejiang as an example to research on the supportmechanism and efficiency of financial system on technological innovation.In the part of theoretical analysis, this paper analyzes the related theories offinance and innovation. Based on the theories, the paper researches the supportmechanism and structure of financial system on technological innovation. And webuild the Romer model to research the relationship between finance and innovation. In the next part, we describe the current situation of financial industry and high-techinnovation. In the part of empirical analysis, the paper use Eviews software to researchproduction function of innovation and find the low support efficiency of financialsystem on technological innovation. We use the data of Zhejiang province to analyzethe support efficiency of every part of financial support. From the empirical analysiswe know that government resource and financial credit have very low contribution rateto innovation, which indicate inadequate of finance to support innovation. In the lastpart, the paper tries to find the reason of low support efficiency and advice somemeasure to improve the support of finance on technological innovation.