The Research On The Influence Of Bilateral Equity Capital Flow On Financial Structure

Finance is the core of the modern economy and the comprehensive reflection of economy activities. However, in many countries, financial structure can hardly keep up with the rapidly increasing economy development which then prohibits further development of their financial industries and economy. With the rapid economy development, this contradiction is becoming more obvious which will then become the bottleneck that restrict the global economy. In the current digital high-tech economy era, the overall trends of financial development are increasing globalization and growing bilateral equity capital flow. Therefore, it is important and urgent to have an in-depth research on how bilateral equity capital flow influence financial structure.This paper use the methodology combining qualitative analysis, theoretical analysis and case study which elaborate the methods and mechanism of influences from bilateral equity capital flow on financial structure. In chapter one, the paper introduces the research background, meaning, domestic and international current research situation. In chapter two, it elaborates that the bilateral equity capital flow based on leveraging investment combination is able to increase the portfolio return obviously under the similar risk. At the same time, under the optimized asset setting, it proves that the mentioned improvement can lead the finance structure to develop towards the market dominating type using calculus model. In chapter three, the paper provides the estimation of relevant data among multiple countries on bilateral equity capital flows and financial structures. It also analyzes the recent trend of inflow, outflow and financial structure for countries from different development categories based on the statistics on their total bilateral equity capital flow values and respective proportions. In chapter four, the paper provides a case study through dashboard data model on the relationship between bilateral equity capital flow and financial structure. It indicates that both equity capital inflow and outflow will have an obvious positive effect promoting the financial structure towards market dominating type. In chapter five, the paper produces advices on the future development of financial structure system utilizing three aspects-the rationality of bilateral equity capital flow, risk leveraging mechanism and asset portfolio function, and international experience.