Research On The Interaction Between Financial Structure Optimization And Manufacturing Structure Upgrading

With the rapid growth of China's economy since the reform and opening-up in 1978,China has become a emerging and developing nation dominated by processing and manufacturing industries from a traditional agricultural one.In 2005,China accounted for one fourth of the global manufacturing output,blooming into the world factory.However,with the lack of technology-intensive industry,its manufacturing which is headed by low-tech and low added-value labor-intensive industry is still at the low end of global division system and value chain.Boosting high technology industries and strategic emerging industries has been the vital part of Chinese manufacturing power strategy.Finance is the core of modern economy,so financial efficiency and economic growth will be greatly enhanced if financial mix match that of economy.However,China's financial structure has some problems such as too large proportion of indirect financing and the lack of direct financing.Therefore,we need combine manufacturing structure upgrading with financial structure optimizing so as to promote the transformation of economic structure.Based on the research status of financial structure optimizing and manufacturing structure upgrading,this article makes a conclusion of their relationship through model inference and theoretical analysis.The author makes VECM model,Granger Causality Tests and IRF test to examine their relationship by using the data drawn from manufacturing and financial structure from 1999 to 2015.It turns out that financing structure,banking market structure and manufacture structure embrace long-term equilibrium and short-term undulation relationship.On the one hand,there is positive correlation existed between financing structure and manufacturing structure.financing structure is mutually beneficial to manufacturing structure and the upgrading of manufacturing structure also promote optimization of financing structure.And there is negative correlation existed between banking market structure and manufacturing structure.Namely,low concentration on loans and deposits of banking is conducive to the upgrading of manufacturing structure.what's more,The upgrading of the manufacturing structure reduces the concentration of deposits and loans in the banking.On the other hand,between financing structure and manufacturing structure exist a causal relationship,so does between banking market structure and manufacturing structure.According to theoretical analysis and empirical results,the author illustrates how financial structure optimizing promotes the upgrading of manufacturing structure at last.