The Impact Of Regional Financial Development On Export Scale And Structure

The report of the 19^th CPC National Congress pointed out the necessity to“deepen institutional reform in the financial sector,make it better serve the real economy…,expand foreign trade,develop new models and new forms of trade,and turn China into a trader of quality”.Up to now,a large number of articles have provided an empirical basis for financial development promoting China's foreign trade,but many of them ignored the heterogeneities between different regions.Through theoretical analyses and empirical tests,this paper links the two economic themes of finance and trade.On the basis of considering the differences between provinces and industrial financing characteristics,this paper explores the role of financial development in promoting export scale and structure,which has a positive practical significance.This paper first reviews and integrates the research results of domestic and foreign scholars,and then adjusts the heterogeneous enterprise model with credit constraints according to the actual situation in China and suits it to the provincial level.Based on the analyses,this paper puts forward relevant hypotheses and mechanisms,and finally uses the customs export data from 2001 to 2014 to carry out empirical tests.This paper finds that financial development in each region can ease the credit constraints faced by export enterprises,and increase local enterprises'participation into exports by lowering the threshold of export productivity,resulting in the increase of the number of export enterprises,the varieties of export products and ultimately the total export value in the region.These conclusions are very significant in the empirical tests after controlling the fixed effects of years,industries,regions,destinations and so forth.Moreover,the effects of financial development on export scale is more prominent for industries with higher external financing dependence and lower collateral assets.Under different trade patterns,the role of regional financial development in promoting ordinary trade exports is particularly obvious;under different forms of ownership,regional financial development can promote the growth of stated-owned and private enterprise exports,while for foreign-invested enterprises,financial development even decreases export.In terms of export structure,apart from significantly raising the proportion of general trade exports and private enterprise exports,the improvement of regional financial development can also to some degree increase the level of export complexity for high-tech industries.In order to enhance the reliability of these results,this paper conducts a large number of robustness tests by selecting alternative indicators,introducing control variable cross-terms,and narrowing the range of aggregation.They turn out to be strong evidence for the research.This paper argues that in order to enhance the role of regional financial development in promoting exports,further developing the scale of the credit market is one thing,and for another,it is necessary to strengthen the tie between financial policies and industrial policies.It would be advisable to provide support for industries with weak financing features,and actively give aid to small and medium-sized private enterprises to ease credit constraints in a more targeted way.