Empirical Research About The Relationship Between Financial Development And Industrial Structure Upgrading Of Jiangsu Province

Industrial structure is an important symbol to measure the stage and the level of economic development of a country. A high level and rational industrial structure can adapt to the requirement of the market, promote the economic efficiency to maximum and accelerate the pace of social development. The notice announced by National Development and Reform Commission about promoting industrial restructuring in 2007, the 2011 National "Twelfth Five Year Plan" and a series of documents declared by The State Council about accelerating the development of producer services in 2014 all stress the important role of industrial structure to the healthy and rapid development of economy. The finance is the inherent power of modern economic development, which is also an important tool for social capital flows and important means to improve the efficiency of capital utilization. The optimization and upgrading of industrial structure needs financial support, no matter high-tech industry or high value-added industries or agriculture, the penetration degree and level of development about financial capital will directly affect the development of economy and industrial structure adjustment. Therefore, studying the intrinsic link between financial development and the upgrading of industrial structure of Jiangsu Province and how the financial development affecting the upgrading of industrial structure has both theoretical significance and practical significance.At first, this article summarized the mutual mechanism between financial development and industrial structure in theory by reviewing the foreign and domestic literature and research results. The finance influences the upgrading of industrial structure via the source and use of capital of the credit market and the incremental configuration and inventory configuration of the security market, in addition, The finance also affect the industrial structure adjustment by the formation mechanism, oriented mechanism and credit catalytic mechanism of industrial capital; At the same time, industry structure will affect the size and structure of the financial markets, which will enhance the further development of finance.Then, this article reviewed the data of Jiangsu Province about financial development and industry structure during 1992 to 2012, analyzing the historical process and current status of the financial development through three angles: financial scale, financial structure and financial efficiency, moreover, this article pointed out that there are some problems about small financial scale, unreasonable financial structure and low financial efficiency. Meanwhile, even though the proportion of secondary and tertiary industries has been increasing, the level of industrial structure is relatively low and the problem that the services and high-tech industry lags behind other issues still relatively prominent.After that, this article had collected and handled the statistic data of Jiangsu Province during 1992 to 2012, considering the FIR, FER, IFR and DFR as the explanatory variables and the IUR as the explained variable, then establishing the appropriate measurement model to examine the relationship of them empirically. We found that FIR and IFR can accelerate the upgrading of industrial structure, and from the short term point of view, the influence of FER and DFR worked on IUR is not significant, but they also can promote the industrial structure adjustment chronically, which means that they have a certain lag to the industrial structure.At last, this paper puts forward policy recommendations based on the results of theoretical analysis and empirical analysis: Deepening the reform of financial system and playing the guiding role of indirect financial capital; developing the capital market vigorously and optimizing resource allocation; developing technology finance actively which can promote the upgrading of industrial structure by high-tech industries. In the society of low-speed economy and serious environment problem, this paper provides some suggestions about how to promote industrial upgrading.