Financial Development And Upgrading Of Regional Industrial Structure

Optimization and upgrading of industrial structure is the key to a new level of development for our national economy. Transformation of economic growth and ensuring balanced sustainable development need to rely on the adjustment and upgrading of industrial structure. Since the reform and opening up, China has acquired rapid economic development, and the industrial structure constantly tend to be rationalized and high gradation. However China’s regional industrial structure is still unbalanced, uncoordinated and unhealthy. It is a vital problem that how we should promote the optimization and upgrading of industrial structure scientifically and effectively. Finance system is an important hub of modern economy. By channeling savings into investment and guiding capital flow, finance system improves the efficiency of resource allocation and supports the real economy, and at the same time promotes the adjustment of industrial structure changes. It is of great important theoretical and practical significance to solve the problem that how financial development should better serve the issue of the strategic adjustment of industrial structure.This paper made use of theoretical and empirical research methods, focusing on how financial development affects the regional industrial structure optimization and upgrading. In the part of theoretical study, the relevant literature and theories are reviewed to analyze the impact financial development and other factors on the regional industrial structure. By using statistical descriptive statistics and regression methods, the part of empirical study establish the panel data model and quantile regression model with the all provinces’ panel data from 1998 to 2012. Conclusions are summarized as follows:First, the optimization and upgrading of industrial structure is the result of many factors. Financial development affect the optimization and upgrading of industrial structure through three mechanisms including industrial capital formation, capital-oriented, information identification and risk aversion.Second, banks still account for a large proportion in China’s current financial system. Securities and insurance market development is lagging behind. Overall operational efficiency and financial ability to resist risks needs to be improved.Third, expanding of the financial scales and improving of the financial efficiency can promote the regional industrial structure optimization and upgrading. This effect varies at different levels of the industry development. Financial scale has been playing a positive role in promoting and optimizing the industrial structure, which will increase with a higher level of regional industrial structure upgrading. Financial efficiency has a positive impact for the optimization of industrial structure, which does not passed the significance test. With the advance of industrial structure optimization process, the promoting effect shows a slow decline after the rapid upward trend.Based on the conclusions, the paper advises that the financial system which support regional industrial structure optimization should be established and industry policy for different region at different levels should be enhanced.