The Effect Financial Fragility On Efficiency Of Industrial Capital Allocation In China

This article studies the construction of China's financial fragility comprehensive index,and the effect of financial fragility on the efficiency of industrial capital allocation,and so on.The specific analysis is carried out according to the following analysis:Firstly,based on the existing literature research,the concept of financial fragility was defined and discussed from five perspectives: procyclicality of the financial system,financial liberalization,information asymmetry,incomplete institutions,and irrational investors.Causes of financial fragility.This paper discusses four methods of measuring financial fragility and the theoretical research on the impact mechanism of financial fragility on the efficiency of industrial capital allocation.It also discusses the positive and negative mechanism of the financial system's impact on the real industry,showing the financial fragility trend.The path and result of the risk transmission of the real industry,as well as the impact of financial fragility on the financial industry as a result of financial fragility leading to destabilization of financial capital.Secondly,through four empirical analyses,the first is to select 15 financial indicators that are suitable for China's current national conditions,and use the principal component analysis method to construct a comprehensive indicator of China's financial fragility during this period.It can be seen that the degree of financial fragility in China is in stages.second,according to Wurgler's capital allocation model,measuring the efficiency of China 's industrial capital allocation,we can see that China 's overall level of industrial capital allocation efficiency is significantly effective,and at the same time subdividing the industry,we found that the primary and secondary industries in China Capital allocation is effective,but tertiary industry capital allocation is invalid.Third,modify the capital allocation efficiency estimation model of Wurgler to measure the degree of influence of financial fragility on the efficiency of capital allocation in China's overall industry and the three major industries.financial fragility has a restraining effect on the primary and secondary industries in China,and a promoting effect on the tertiary industry.At the same time,it is found that the level of economic growth and the degree of regional economic development of the introduced control variables have also affected the capital allocation of China's physical industry.Inhibition;Fourth,further research on the effect of financial fragility on the tertiary industry.The tertiary industry is subdivided into six industries: real estate,transportation,warehousing and postal services,finance,wholesale and retail,accommodation and catering and other service industries.The regression of Wurgler's capital allocation model found that without adding the variable of financial fragility,only the capital allocation efficiency of the accommodation and catering industry was positive,and the rest were negative.When adding the variable of financial fragility,we found that it only promotes the capital allocation efficiency of the financial industry.This and the financial fragility described in this article will make financial capital drive out industrial capital,thus making financial capital in the virtual economy.Profit-seeking and idling have made the financial industry over-expanded,and the real industry sector faces the difficulty of financing.This theory is in line with the theory.Finally,I put forward suggestions based on the above analysis.First,to improve the efficiency of capital allocation in the tertiary industry,we can introduce the private sector in the pure public goods industry and increase private investment.At the same time,appropriately reduce capital access,break the industry monopoly phenomenon,and make capital free.flow.Second,constantly improve financial supervision,establish a sound regulatory indicator system,treat financial innovation with caution,and gradually open up financial markets.Third,continuously improve the ability of financial services to the physical industry.First,improve the financial market system,rationally optimize the financial system,increase the effective supply of finance to the physical industry,and serve the physical industry as the goal.Second,adjust the scale,speed,and structure of financial development.To promote the coordinated development of finance and the real industry Finance is to serve the real industry.The development of finance must match the real industry and cannot exceed the limit of serving the real industry.The two must be coordinated and unified.Fourth,the state needs to formulate reasonable foreign-invested industrial policies and related coordinating supporting policies to correctly guide foreign investment and improve the quality of multinational companies' investment in China's industries.