Research On The Impact Of Stock Market Concentration On Economic Growth

The stock market can not only finance enterprises with capital needs and promote the development of enterprises,but also reflect the value of enterprises through stock prices.With the continuous expansion of the stock market,its influence on the economy is also growing,and China is paying more and more attention to its important role in social development.The 19 th National Congress and the 20 th National Congress of the Communist Party of China clearly put forward’increasing the proportion of direct financing’,which shows that the healthy development of the stock market is of great significance to China’s high-quality development.In the current academic circles,there are a large number of literatures on how financial development affects economic growth,but they mainly focus on the overall scale,efficiency,financial structure and internal structure of banks,while there are few studies on how the internal structure of the stock market affects economic growth,especially on the concentration of China’s stock market.There are few studies,so this paper attempts to explore the impact of China ’s stock market concentration on economic growth.This paper selects the provincial panel data of China from 2005 to 2015 as the research sample.Firstly,the fixed effect model is used to explore how stock market concentration affects economic growth.Secondly,it examines whether stock market concentration affects economic growth through regional innovation;on this basis,the interaction term is added to further explore whether the proportion of direct financing and the proportion of non-state-owned economy will affect the inhibitory effect of high stock market concentration on economic growth.Finally,in order to enhance the reliability of the conclusion,the robustness test is carried out by changing the calculation method of stock market concentration,excluding samples in special years and using instrumental variables.The results of this paper show that:(1)The increase of stock market concentration will have a negative impact on economic growth,that is,the increase of stock market concentration will inhibit economic growth.(2)Stock market concentration can inhibit economic growth through the degree of regional innovation,that is,the degree of regional innovation plays an intermediary role between stock market concentration and economic growth.(3)The increase in the proportion of direct financing will weaken the inhibitory effect of high stock market concentration on economic growth,that is,the higher the proportion of direct financing,the weaker the inhibitory effect;the higher the proportion of indirect financing,the stronger the inhibition.This provides empirical support for China’s proposed ’increasing the proportion of direct financing’.(4)The increase in the proportion of non-state-owned economy will also weaken the inhibitory effect of high stock market concentration on economic growth,that is,the higher the proportion of non-state-owned economy,the weaker the inhibitory effect;the higher the proportion of state-owned economy,the stronger the inhibition.This has added a basis for China to encourage and support the development and growth of private economy and private enterprises.The possible innovations of this paper are mainly reflected in two aspects.First,research perspective innovation.The existing literature mainly examines the impact of stock market concentration on economic growth from a global perspective.There is no literature to study the situation of individual countries.However,the development of stock markets in each country is different,and specific policies are also different.This impact may also be different.Therefore,this paper discusses the impact of stock market concentration on economic growth from the perspective of a single country for the first time,which helps to deepen the understanding of the relationship between stock market and economic growth.Second,it broadens the thinking of in-depth study of the impact of stock market concentration on economic growth.The existing literature mainly studies what factors play a regulatory role in the relationship between stock market concentration and the degree of innovation of intermediary variables.For the first time,this paper examines whether the proportion of direct financing and the proportion of non-state-owned economy will affect the inhibitory effect of high stock market concentration on economic growth,and provides some reference for the government to formulate relevant policies,especially in encouraging small and medium-sized enterprises to give priority to direct financing and supporting the development of private enterprises.