Financial Development,Industrial Structure, TFP

For 30 years of reform and opening up, our economic has a rapid development and has achieved significant staggered results. With the industrial structure upgrading, total factor productivity is growing. Tertiary industries, especially the financial sector, have changed dramatically. With the financial products increasingly diversified and the financial markets constantly improving, the finance has become an important means of optimizing the allocation of resources. Meanwhile, the financial development has an important role in the improvement of national or regional economic development level and the industrial structure adjustment. Financial development achieves sustainable economic development by absorbing social dispersed capital, optimizing the allocation of resources, guiding the industrial structure upgrading and enhancing productivity levels. In the complex economic background, it is pressing to enhance the industrial structure upgrading and the finance plays an important role in the process of industry restructuring. Therefore, the study of relationship among the financial development, industrial structure and total factor productivity, especially, the study of the mediating effect that financial development affects the TFP through the industrial structure, is the key to realize the rational allocation of financial resources, improve the industrial structure and improve TFP. It has important practical significance to improve the quality of China’s economic development.Existing researches focus on the linear relationship among financial development, industrial structure and total factor productivity. It is fewer to study the mediating effect that financial development affects the economic growth through the industrial structure. In addition, the empirical research is even fewer. In this article, based on the provincial level of 28 cities, we use Solow residual method to estimates the 2007-1012 TFP level. Then use dynamic panel data to establish the mediating effect model of financial development, industrial structure and TFP. At the end, estimate the model by statal2.1 GMM method to study the relationship among financial development, industrial structure, and the TFP. And make use of the mediating effect test program put forward by Wen zhonglin to verify the effect that financial development affects the economic growth through the industrial structure.In the empirical analysis, we analyze the mechanism of financial development, economic growth and TFP through theory, disposal the latest statistical data and analyze the status quo of financial development, industrial structure, and economic growth. The results show that financial development has a significant positive correlation with industrial structure and total factor productivity. Financial development has a significant mediating effect on economic growth through the industrial structure. Finally, based on the theoretical and empirical analysis, provide policy recommendations for the sustainable development of China’s economy.