Financial Development, Economic Growth And Industrial Structure Upgrading

Regional economic integration is an important strategy for China’s economic development.In this paper,the panel fixed effect model,intermediary effect and threshold model are used to study the connection between financial development and industrial upgrading,selecting the panel data of Chinese prefecture-level cities from 2007 to 2016.By comparing and analyzing the situation among the eastern,central and western regions,we can find the different mechanism between financial development and industrial upgrading in different regions.Firstly,sorted out the relevant researches and the theories and research methods of scholars are used for reference.Secondly,considering the special threshold points that may exist in different development periods,the optimal financial development point is obtained,and considered how to further the financial development researches.The results show that: Firstly,there is an inverted "U" shape between financial development and industrial upgrading,and the optimal solution is obtained as 7.30 according to the equation.The higher the financial scale,the bad the industrial upgrading.Secondly,regional economic growth has some mediating effect between financial development and industrial structure upgrading.Thirdly,financial development has a double threshold effect,and the financial development has a diminishing marginal utility effect on the industrial upgrading.Fourth,the intermediary role of regional economic growth has a double threshold effect.With the improvement of economic development level,financial development plays a stronger role in promoting industrial upgrading.Fifth,the financial development in different regions has different promoting effects on the upgrading of industrial structure.Finally,for making a robustness test to prove this model is stable,this paper changes the explanatory variable into the financial correlation ratio.In order to overcome the endogeneity,this paper uses the lag period of financial development for the instrumental variable and to conducted the empirical test again.Compared with the existing researches,the innovation points embodied in this paper are as follows: First,considering the inverted "U" shape between financial development and industrial upgrading,and verifying the mediating effect of regional economic growth.Second,considering the special threshold points in the development period,this paper analyzes the mechanism of financial development and industrial upgrading under the circumstances of different financial development levels and regional economic growth.Thirdly,using the panel data of prefecture-level cities,and trying to analyze the heterogeneity of industrial structure in the east,middle and west;In the end,this paper puts forward the conclusions and suggestions: the policies should improve the financial system,and the coupling between the financial development and industrial structure.At the same time,adopting differentiated regulation policies,formulating corresponding policies and system,and to seek reasonable ways and means.Only in this way can the regions better promote the industrial structure upgrade.