Research On The Impact Of Financial Development And Industrial Structure On Income Gap Between Urban And Rural Areas

With the process of market-oriented reform and globalization,China's economy has been developing rapidly,the industrial structure is becoming more and more optimized and the level of financial development is increasing,but the income gap between urban and rural residents in China is showing an expanding trend,which has seriously affected the long-term stable development of the society and economy.Financial development and industrial structure are closely related to the income gap between urban and rural areas.On the one hand,financial development expands the income gap between urban and rural residents through the threshold effect and non equilibrium effect,and the poverty reduction effect of financial development will also reduce the income gap between urban and rural areas.On the other hand,the upgrading of industrial structure can reduce the income gap between urban and rural areas,mainly in the following aspects:the upgrading of industrial structure has driven the transfer of agricultural surplus labor to the second,third industry with higher labor productivity,thus raising the income of the labor force in the agricultural sector and narrowing the income gap between the agricultural sector and the present industrial sector.At the same time,financial development can accelerate the upgrading of industrial structure through financial support,and upgrade the industrial structure to promote financial development,and finally achieve the equilibrium state of mutual adaptation and integration of financial development and industrial structure.Therefore,it is of great theoretical and practical significance to study the related path of the financial development,the industrial structure and the combined effect of the two parties on the income gap between the urban and rural areas,and then to find a reasonable improvement measure,which is of great theoretical and practical significance to improve the situation of the widening gap between urban and rural income gap and the construction of a harmonious society.First of all,this paper combs the research achievements and basic theories on financial development,industrial structure and urban and rural income gap both at home and abroad,and analyzes the internal mechanism from the perspective of the impact of financial development on the income gap between urban and rural areas,the impact of industrial structure on the income gap between urban and rural areas and the joint role of financial development and industrial structure.Secondly,the empirical part selects the panel data of 31 provinces(cities and autonomous regions)of our country for 1997-2016 years,and introduces the control variables such as government expenditure,physical capital,human capital,regional trade openness,urbanization level and so on.It adopts panel regression and variable coefficient estimation model,and analyzes the industrial structure and financial development and two parties synthetically.The effect of joint effect on regional income gap between urban and rural areas.The results show that:(1)from the national level,the financial development and industrial structure upgrade widened the income gap between urban and rural areas,but the strong combined effect of financial development and industrial structure optimization can reduce the income gap between urban and rural areas.The state should promote the coordinated development of Finance and industry,stimulate the joint action of the two powers,and improve the grim situation of the widening income gap between urban and rural areas in China.(2)from the regional level,the combination of the financial development and the strong industrial structure in the eastern region has promoted the narrowing of the income gap between the urban and rural areas,while the effect of the financial development and the upgrading of the industrial structure is poor.Financial development in the central region has a positive effect on narrowing the income gap between urban and rural areas.The joint role of financial development and industrial structure has widened the income gap between urban and rural areas.The expansion of financial credit in the western region has narrowed the income gap between urban and rural areas,and the upgrading of the industrial structure and the integration effect of the two have expanded the income gap between urban and rural areas.It is clear that the region has not released the one stone and two birds effect of financial development and industrial integration,and still needs to deepen and strengthen the mutual assistance and complementarity of the financial development and industry.(3)there is regional heterogeneity in the impact of industrial structure and financial development on the urban-rural gap.The effect of financial development and industrial structure upgrading on urban and rural income gap is positive,and the combined effect of industrial structure upgrading and financial development is beneficial to reduce the income gap between urban and rural areas,but the impact strength of the two is gradually weakened as time goes on.Finally,this paper puts forward some policy recommendations to narrow the income gap between urban and rural areas from the aspects of promoting the upgrading of industrial structure and the level of financial development.