Research On The Impact Of Trade Opening On Regional Financial Development

In the past 40 years of reform and opening-up,China is gradually integrating into globalization.According to the report of the 19 th CPC National Congress,the door of China's opening-up will not be closed,but will open wider and wider.In recent decades,the economic development of the world has proved that opening is an important power of economic development.With the increase and deepening of the opening of the economy,it is unlikely that the financial systems of various countries will follow the same rules as they used to.On the one hand,cross-border transactions of products and technologies require more optimized financial services;on the other hand,cross-border flows of capital require more efficient financial markets.Opening to the outside world and financial development are interlinked and infiltrated,so more and more scholars have turned their research perspectives from the study of the impact of economic openness on economic growth,the impact of financial development on economic growth,on the intrinsic link between opening up and financial development.At present,the world is in a period of great development,great change and big adjustment.At the same time,due to the differences in regional resource endowments,geographical location and other conditions,there are large regional differences in the development of China's eastern,central and western regions.The impact of trade openness on financial development may also have significant regional differences.Therefore,studying the path of trade openness to financial development and the impact and differences of trade openness on regional financial development are of great significance to China's future development.Based on the above-mentioned realistic background and considering the great imbalance of regional development in China,this paper uses the panel data of 30 provinces and cities in China from 1993 to 2017 to theoretically study the path of trade openness to financial development,and empirical test,then study the specific impact and differences of China's trade openness on regional financial development.Firstly,on the basis of reviewing relevant literature and empirical evidence,taking trade openness and financial development as the starting point,clearly defining the important concepts involved in the paper,and reviewing relevant theories,focusing on the opening of trade to financial development.The path mechanism is combed and the corresponding mathematical model is constructed to lay the theoretical foundation of the research.Secondly,it analyzes the reality of China's trade openness and financial development,and initially describes the actual connection between trade openness and financial development.Then,using Principal Component Analysis to calculate the comprehensive level of financial development,using the systematic GMM estimation method to test the impact of China's trade opening on financial development since the reform and opening up,and consider the specific impact of trade opening on financial development in different periods.Finally,based on the theoretical and empirical research results,put forward targeted policy recommendations.The main conclusions of this paper are:(1)Theoretical research shows that trade openness promotes financial development by promoting financial scale expansion,improving financial efficiency,and optimizing financial structure.Firstly,trade openness allows companies to enter the international market.At the same time,they can use global resources to organize production and provide guarantees for the sustainable development of enterprises,thereby stimulating more enterprises to choose external financing,and induce external financing demand to increase,thus expanding financial growth as a whole.Secondly,as the degree of trade openness deepens,the distortions caused by trade protection policies and monopolistic behaviors will gradually disappear,and the market will play a leading role in resource allocation.The financial sector will allocate more funds to production efficiency in order to increase profits,thereby improving the efficiency of the allocation of the financial sector.Finally,the trade openment will optimize the financial structure and product structure of the financial sector through industrial structure upgrading and adjustment of import and export structure,thereby improving the overall structure of the financial sector.(2)Empirical research shows that: Firstly,trade openness can promote financial development,but this promotion has significant regional differences.The influence coefficients of the eastern,central and western regions are 1.344,0.027,and 0.0994,respectively.But the theoretical hypothesis is that the promotion of trade in the central region has a greater effect on financial development than in the western region.The possible reasons are: the western region is vast,the human resources are sufficient,and the labor cost is low.The foreign trade enterprises can make full use of the demographic dividend to enter the international market,increase production,expand financing demand and supply,and thus promote the regional financial development level.The promotion of regional financial development is slightly higher than that of the central region.Secondly,with the continuous expansion of trade openness,the greater the role of trade openness in promoting financial development.In 2001-2017,the role of trade liberalization in promoting financial development in the country and the eastern,central and western regions was significantly higher than in the period 1993-2000.This shows that after China joined the WTO in 2001,it actively participated in global trade,international cooperation continued to strengthen,and continuous learning of the introduction of foreign advanced technology and talents has achieved remarkable results,and the competitiveness of enterprises has continuously increased.The overseas listing of Chinese-funded financial institutions has gradually expanded the financial scale and further optimized the financial structure,thus making the promotion of financial development even greater.Thirdly,from the above analysis,it can be seen that trade openness can promote the expansion of financial development as a whole and improve the efficiency of financial operations,but it cannot optimize China's financial structure.As far as China's reality is concerned,although the degree of trade openness is already high,corporate finance still maintains a model of bank credit,which may be one of the important reasons why trade opening has failed to promote the optimization of China's banking-oriented financial structure.Based on the above conclusions,the policy recommendations proposed in this paper mainly include:(1)Promote coordinated development of regional finance in the process of trade openness;(2)Enhance the positive interaction between open policies and regional financial development;(3)Promote the stable opening of capital markets and focus on regional differences;(4)Vigorously develop securities market optimization financing Structure;(5)Enhance the ability of each region to withstand external financial risks.The innovation of this paper mainly analyzes the path of trade openness to regional financial development from the three aspects of financial scale,financial structure and financial efficiency,and measures the comprehensive index of regional financial development level.Taking the WTO as the demarcation point in 2001,the sample will be taken.It is divided into two stages to examine the impact of trade openness on regional financial development and whether it is related to the degree of trade openness.