The Effect Of The Financial Liberalization To The Total Factor Productivity In China

The promotion of financial development to the economic growth has been confirmed by real economic development.The financial marketization reform could improve the vitality of the financial vector so as to improve the efficiency of the flow of funds and the use of efficiency.By this can make the financial vector make better for providing services to the real economy development and make the improvement of production efficiency and the economic growth come true.The total factor productivity is the most effective instrument to measure the validity of the economic increment.It means the efficiency of use in a country.The higher level of the total factor productivity represents the more efficient production capacity.The important most way that the financial development has an positive effect on the total factor productivity is that it can enhance the liquidity supply of currency.Also it can make the enterprise financing easier to promote the production expand as well as improve production efficiency in order to make full use of factors.This paper studies the effect of financial liberalization to the total factor productivity in the financial reform process.On the basis of interpreting the theory and referring the literatures,I put forward this question.This paper first estimates the total factor productivity and in the meantime calculates the marketization index by the principal component analysis to reflect the marketization level of every province.Finally I use the panel data model to estimate the efficiency that the effect of financial liberalization to the total factor productivity.The conclusion is the financial marketization has a remarkable effect on the total factor productivity.Both the expansion of financial vector and the internal competition play a role on this promotion.According to the results,the total factor productivity level is growing as a whole,the total factor productivity level in eastern region is the highest and the west is the lowest.Also the eastern region has the highest market level.In the result of regression,both the improvement of human capital and the infrastructure have a positive effect on the total factor productivity.The former can enhance the productivity of resources and the latter can improve the circulation efficiency of the commodity.