Research On The Impact Of Financial Development To Total Factor Productivity In China

The report of the 19 th National Congress of the Communist Party of China pointed out that China's economy has shifted from a high-speed growth stage to a high-quality development stage.The neoclassical economic growth theory believes that the growth of total factor productivity is an important source of economic growth,and the improvement of total factor productivity will become one of the main drivers of China's economic growth in the future.In the process of economic development,the role of finance in promoting the economy is further manifested.Financial development is related to the overall development of the economy.Long-term economic development is driven by total factor productivity.Therefore,the focus on financial development and economic growth should shift to the relationship between financial development and total factor productivity,and explore the relationship between financial development and total factor productivity.China's economic growth has important theoretical and practical significance.This paper studies the impact of China's financial development on total factor productivity,and divides financial development into formal financial development and informal financial development.After analyzing the background and significance of the relevant objects,it sorted out the relevant literature on financial development and total factor productivity,and analyzed the theories related to financial development and total factor productivity.On this basis,the relationship between financial development and total factor productivity is empirically described.Using the inter-provincial panel data of China from 2001 to 2016,the indirect estimation method and the DEAMalmquist index method are used to measure the financial development level and total factor productivity in turn.With the specific calculation results,the development level of formal financial and informal financial are constructed separately.The panel smooth threshold regression(PSTR)model characterizes the nonlinear relationship between financial development and total factor productivity,and compares the effects of formal finance and informal finance on total factor productivity.The results show that both formal financial development and informal financial development have a threshold effect on total factor productivity.When the level of financial development is low,financial development inhibits the growth of total factor productivity.As the level of financial development increases,the financial development which is higher than the value of threshold will promote the development of total factor productivity;The threshold value of informal finance development is slightly lower than that of formal finance.Therefore,in the use of financial development to promote the growth of total factor productivity,we should adopt a differentiated policy,adapt to different regions to adapt to local conditions,comprehensively deepen financial reforms,promote the improvement of financial development level,and learn from the informal finance,improve the development of the financial system,so as to improve total factor productivity and promote high-quality economic development.