The Impact Of Bank Credit On Regional Return On Capital

As an important macro and micro economic variable,the rate of return on capital not only reflects the profitability of capital,but also guides the flow of capital,which has a far-reaching impact on the healthy development of a country's economy.Especially under the background of the current new normal of China's economy,the deepening of supply-side structural reform and the concession of economic growth rate to the quality of economic development are of great importance.Among the many factors that affect the rate of return on capital,bank credit is undoubtedly an important one.On the one hand,it injects necessary funds needed for the development of the real economy,solves the financing problem of the real economy,and under the action of capital profit-seeking mechanism,it spontaneously optimizes the allocation of credit funds,thus effectively promoting the increase of regional capital return rate.On the other hand,in China's financial system,where state-owned commercial Banks are still dominant,major Banks are affected by national policies and credit mismatch is serious,leading to the difficulty in eff-ecti:vely releasing the rate of return on capital.Therefore,it is of great significance to carefully study the impact of bank credit on regional return on capital.On the basis of sorting out existing literatures,this paper used Bat et at.(2006)'s tmethod for reference,and used the hall-jorgenson rent formula to calculate the return on capital of China's whole,30 provinces and cities as well as the three regions of east,central and west from 1997 to 2017 from the perspective of macro national income accounting data.The results show that;(1)from the national level,the rate of return on capital in China was all positive from 1997 to 2017,but showed a stepwise downward trend on the whole.Among them,the period from 1997 to 2004 was high and stable,the period from 2005 to 2010 was the first significant decline,and the period from 2010 to 2016 was the second downward step.The downward trend of rate of return on capital slowed down,and there was a slig,ht rebound in 201 7.(2)from the provincial level,various provinces and cities in China in recent years return on capital,fluctuated downward trend,the majority of provinces and cities before and after the return on capital in 2004 reached the highest in the sample period,in addition to Inner Mongolia,Tibet,yunnan,qinghai,ningxia and xinjiang and other provinces and cities of the negative return on capital during the sample period had ever seen.(3)from the regional perspective,the return on capital of the three regions decreases in strict accordance with the level of economic development,that is,the eastern,central and western regions.Among them,the return on capital of the eastern and central regions is generally the same,while the return on capital of the western region is significantly lower than that of the eastern and central regions.In order to deeply explore the influence of bank credit on regional return on capital,on the basis of theoretical analysis,the panel econometric model is built by using the data of 30 provinces and cities in China from 1997 to 2016.First,consider the linear relationship between them,the conclusion is as follows:(1)the total sample,according to the results of linear regression of 1997-2016,bank credit to the return on capital in various cities and provinces overall showed simple negative influence,it has to do with state-owned commercial Banks in China is closely related to the dominant mode of financing,loan high spreads to the real economic benefits of interception,the credit resources mismatch between state-owned and private enterprises and bank credit to the earnings cycle longer high-tech enterprises are inhibited the region,such as tilt improved returns on capital.(2)the linear regression results of sub-samples in different regions show that the bank credit in the eastern and central regions has an inhibitory effect on the return on capital of the region,and the degree of inhibition in the central region is stronger than that in the eastern region,while the bank credit in the western region has no significant effect on the return on capital of the region.Second,further into the bank credit index of square building nonlinear econometric model for total return samples,the results showed that the influence of the return on capital in the long term bank credit to area shows the characteristics of "Un type changes,the turning point for the bank credit as a share of GDP is 1.92,which suggests that our country present stage of bank credit supply is enlarge the space,the key is to optimize the structure of the supply of credit.Finally,some policy Suggestions are proposed based on the above conclusions.