Study On The Influence Of Financial Capital Deepening On Regional Total Factor Productivity

Since 1994,when the American economist Paul Krugman proposed the idea of ?No Miracles in East Asia?,the question of total factor productivity has drawn increasing attention from the academic community.While in recent years,with the rising cost of factors,the accumulation of ?Middle Income Trap? risks and the disappearance of ?demographic dividends?,which means that China's economic growth also needs to shift from factor-intensive input to the type of total factor productivity supported by technological innovation.So that economic development is entering the ?New Normal? periods,and the factor combination efficiency of the TFP scale should become a new source of power for China's economic growth.At the same time,China is in a critical period of financial deepening reforms and supply-side structural reforms.Financial capital is the bloodline of the entire economic development.The deepening of the real economy will help improve the liquidity of investment and the return rate of financial capital.The technological innovation and the optimal allocation of factors to the physical industry are undoubtedly the most critical step and the key to achieving the improvement of total factor productivity.Based on the above background,this paper studies the influence of financial capital deepening on regional total factor productivity from both theoretical and empirical perspectives.Firstly,based on a review of domestic and foreign researches on financial development and total factor productivity,we defined the basic concepts of financial capital,financial capital deepening,and total factor productivity,and systematically reviewed the theory about financial capital,Based on the above background,this paper studies the influence of financial capital deepening on regional total factor productivity from both theoretical and empirical perspectives.Firstly,based on a review of domestic and foreign researches on financial development and total factor productivity,we defined the basic concepts of financial capital,financial capital deepening,and total factor productivity,and systematically reviewed the theories such as financial capital theory,financial development theory and economic growth theory that can be referenced by this paper,and then through the direct financial capital deepening and indirect financial capital deepening two paths analysis of the path of financial capital deepening influence on total factor productivity,and from the three perspectives of market mechanism,government mechanism and social mechanism analysis the influence of financial capital deepening on total factor productivity,and finally analyzes the intrinsic link between financial capital deepening,technological innovation,and total factor productivity by establishing an endogenous growth model for technological innovation that has been introduced into the financial sector.Then it analyzes the actual conditions and regional differences of China's financial capital deepening,and uses Solow residual method to measure the total factor productivity in China's regions.On the basis of this,using provincial balance panel data from 2001 to 2015 as a sample,the deepening of bank capital,deepening of securities capital,and deepening of insurance capital are used to measure the level of financial capital intensification,empirically testing the deepening of financial capital for the nation and the East.The influence of total factor productivity in the middle and western regions finally put forward relevant policy recommendations based on the research conclusions.The research conclusions of this paper are as follows:(1)The theoretical analysis shows that financial capital influences technological progress and promotes optimal allocation of factors through technological innovation companies and projects that are deepened in the real economy,and ultimately affects total factor productivity.First of all,the deepening of financial capital mainly depends on the direct financial capital deepening and the indirect financial capital deepening.It solves the financing constraints problems faced by technologically-innovative companies and projects due to their high financing costs,high risks,and high information asymmetry.The realization of the technological progress of real economy enterprises and projects will lead to the optimization and matching of the factors and ultimately affect the total factor productivity.Second,the deepening of financial capital's influence on total factor productivity is achieved by giving full play to the leading role of the market mechanism,the guidance and regulation of the government mechanism,and the supplemental role of the social mechanism.The three are indispensable.Finally,due to the differences in the natural environment,economy,politics,and society of a country or region,under different conditions,the direct financial capital deepening and indirect financial capital deepening will have different effects on total factor productivity.(2)From the empirical results,in general,the deepening of financial capital has a more obvious effect on total factor productivity,but the specific situation varies depending on the region.From the perspective of the national level,whether the deepening of bank capital or the deepening of securities capital has significantly promoted the improvement of total factor productivity.The effect of deepening insurance capital on total factor productivity is not significant.From an interregional level,the deepening of securities capital has significantly promoted the TFP in the eastern region;deepening of bank capital has clearly contributed to the improvement of total factor productivity in the central region;and the deepening of insurance capital has a significant positive effect for the total factor productivity of the western region.(3)The uneven distribution of China's financial capital,the regional distribution differences of bank capital,securities capital and insurance capital among the three major categories of financial capital,is an important reason for the inconsistent effect of deepening financial capital on regional total factor productivity,even if some regions are not significant.In the analysis of the current situation in the fourth chapter,the deepening of bank capital,the deepening of securities capital,and the deepening of insurance capital have significant differences in the eastern,central and western regions.In the eastern region,the deepening of capital in banks,securities,and insurance is higher than in the central and western regions.Economic,historical,and geographical environments are all important reasons for the uneven distribution of financial capital.Therefore,it is necessary to optimize the allocation of financial capital in various regions from the perspectives of politics,economy,society,and history so that it can be adapted to the level of economic development in the region.Otherwise,idleness and waste of financial capital can easily be caused.Based on the above findings,this paper proposes the following related policy recommendations:(1)Increase investment in technology in emerging industries and establish a long-term mechanism to promote technological innovation.(2)Bank capital intensification should support the absorption of technology spillover while supporting technological progress.(3)Accelerate the development of the capital market,improve the direct financing mechanism,and expand the direct financing channels for technologically advanced companies.(4)Strengthen the legal supervision of the insurance market and change the people's insurance concept.(5)Implement differentiated regional regulation policies and strategies.