The Research About Financial Efficiency Affects The Consumption Volatility Effect Of Financial Openness

The influence of financial openness on consumption fluctuation has been a concern of academic circles all over the world.Small consumption fluctuation is conducive to the stable development of a country's economy,which is on the goals pursued by governments around the world.Financial efficiency is part of financial development reflects the strength and cost of the financial sector's role in the economic system,which is an important factor affecting the efficiency of the economic system.With the development of financial integration,cross-border capital flows become more and more frequent,and the financial markets become more and more closely connected.In this context,it is of certain practical significance to study the influence of financial efficiency on the consumption fluctuation effect of financial openness.Starting from the macro perspective,this paper divides financial efficiency into financial institution efficiency and financial market efficiency,and comprehensively studies the influence of a country's financial efficiency on the consumption fluctuation effect of financial openness.In the process of research,this paper also examines the impact of financial openness on the volatility of private consumption,the efficiency of financial institutions and the efficiency of financial market on the volatility of private consumption.In the empirical study,a combination of dynamic panel model and panel threshold model is used to study the nonlinear influence of financial institution efficiency on financial openness.On this basis,this paper collects the panel data of provinces in China,and studies the influence of China's financial market efficiency on the consumption fluctuation effect of financial opening by using the dynamic panel method.The empirical study on the panel data of 70 countries from 2001 to 2015 with the systematic GMM method found that the expansion of financial opening will increase the fluctuation of private consumption,the improvement of the efficiency of financial institutions can reduce the fluctuation of private consumption,and the improvement of the efficiency of financial market will increase the fluctuation of private consumption.The efficiency of financial institutions has influence on the consumption fluctuation effect of financial openness,while the efficiency of financial market has insignificant influence on the consumption fluctuation effect of financial openness.Further using the panel threshold model,it is found that there is a single threshold for the effect of financial institution efficiency on the consumption fluctuation effect of financial openness.When the financial institution efficiency of a country is less than 0.69,the effect of expanding financial openness on the increase of private consumption fluctuation is close to 0.When the efficiency of a country's financial institutions is greater than 0.69,the effect of expanding financial openness to increase the fluctuation of private consumption is significantly enhanced.The empirical study on panel data of 28 Chinese provinces from 2007 to 2016 with the systematic GMM method found that the opening of finance in China would aggravate the fluctuation of private consumption and the improvement of financial market efficiency would reduce the fluctuation of private consumption.The efficiency of financial market in China has insignificant influence on the consumption fluctuation effect of financial openness.