Empirical Research On The Impact Of Finance On The Real Economy

The real economy occupies a basic and dominant position in the national economic development.It is a key link for China to promote the comprehensive economic structure reform to focus on improving the development quality of the real economy.The report to the 19 th national congress of the Communist Party of China(CPC)points out that the construction of a modern economic system needs to take the real economy as the focus of economic development,and stresses that the financial system should be promoted to deepen reform,so as to enhance the financial services to the real economy.In recent years,the development scale of finance and real economy in China is expanding day by day.However,it also shows the tendency that the financial sector develops too fast relative to the real sector.This will not only affect the structural reform of the financial industry itself,but also further hinder the healthy and sustainable development of China's real economy.In this context,it is necessary to re-examine the relationship between finance and the development of real economy.Therefore,this paper introduces the perspective of sector development gap to deeply discuss the relationship between China's current financial development level and the growth of the real economy,so as to provide a reference for finance to fully play its role in supporting and serving the real economy.Based on China's inter-provincial panel data from 1999 to 2018,this paper constructs a dynamic panel empirical model,and uses a system GMM estimation method to analyze the impact of finance on the real economy from the perspective of sector development gap.Firstly,the financial development level index is used to measure the degree of financial development and explore the direction of financial effects on the real economy.Secondly,the index of sector development gap is introduced to analyze whether the situation of development of financial sector exceeding real sector will affect the original mechanism of the two.From the perspective of sector development gap,this paper further discusses whether the development gap between the financial sector and the real sector can also act on the growth of the real economy through other transmission channels.On this basis,this paper subdivides the provinces and municipalities into three different regional samples,and conducts empirical regression on the sample data of the eastern,central and western regions respectively to investigate whether there are regional differences in the impact of finance on the real economy.The empirical results show that the improvement of China's financial development level can promote the growth of the real economy,but the positive promoting effect between the two will be restricted by the sector development gap,that is to say,the too rapid development of finance relative to the real economy will hinder the growth of the real economy.With the development of the financial sector surpassing the development of the real sector,the positive impact of financial development on the growth of the real economy will even be completely transformed into a negative impact.At the same time,in addition to the level of financial development,there are other transmission channels such as the degree of government intervention,human capital and the level of inflation in the process of affecting the growth of real economy.As far as regional samples are concerned,there are indeed regional differences in the impact of finance on the real economy from the perspective of sector development gap.Finally,this paper summarizes the results of the empirical research,combines the above theoretical and practical analysis,and puts forward targeted policy recommendations.