Financing Structure Dissimilation And Economic Growth

The report of the 20th National Congress pointed out that deepening the reform of the financial system,strengthening and improving modern financial supervision,strengthening the financial stability guarantee system,improving the functions of the capital market,and increasing the proportion of direct financing.As the main body of microeconomics,enterprises require different types of financing channels to support their investment and innovation activities during their development.The rational allocation of financing structure will not only improve the efficiency of resource allocation and reduce financial risks,but also prevent systemic and credit risks in financial markets,reduce excessive leverage in the financial system,maintain financial stability and thereby promote economic growth.Shadow banking is a non-standard financing channel in the financial sector that operates outside the scope of regulation and has features such as hidden risks and cross-contagion.Once the funding demand side of shadow banking defaults on credit,the risk can be transmitted to the bank credit system and the formal financial system through interconnectedness and cross-contagion,ultimately having a significant impact on the entire financial system and triggering systemic financial risk.Against the backdrop of the gradual shadowing of financing channels,the introduction of the "new asset management regulations" has helped to prevent excessive concentration of investment and high leverage,reducing financial risks.However,although the proportion of RMB loans surged shortly after the introduction of the "new asset management regulations," traditional formal financial institutions showed weak willingness to lend,leading to a substantial decline in shadow banking financing,a temporary slowdown in the growth of social financing scale,and a serious imbalance in the financing structure,which has had a significant impact on the stability of the financial system and the level of economic growth.Therefore,at a critical time in China’s economic transformation,studying the impact of financing structure dissimilation on economic growth can shed light on the potential risks of these non-standard financing channels to the stability of the financial system and economic growth.This can help policymakers better understand the fragility and potential threats to the financial system and take appropriate steps to maintain financial stability and promote sustainable economic growth.Based on the background of the "new asset management regulations",this paper systematically examines the transmission mechanism and time-varying effect of financing structure dissimilation on economic growth in China.In the current stage of diversified financing channels,this article holds important theoretical and practical significance for preventing financial risks,maintaining the stability of the financial system and bank credit,and promoting stable economic growth.Theoretical significance lies in providing an in-depth analysis and understanding of the relationship between financing structure dissimilation and economic growth.The financing structure may undergo dissimilation in response to various changes and challenges,manifesting in two critical forms:the shadow structure of financing and financing structure shadowing.By scrutinizing these dissimilation forms,we can unveil their impact on economic growth,offering novel perspectives and extensions for related theoretical research.In practical terms,this article assumes a pivotal guiding role in preventing financial risks,maintaining financial system stability,and ensuring bank credit stability.With the diversification of financing channels in our country,exploring the impact and mechanism of financing structure dissimilation on economic growth can aid formulate more precise and effective regulatory policies.Strengthening supervision over financing structure dissimilation can reduce the accumulation of financial system risks,enhance the stability of China’s financial system,and create a conducive environment for sustainable economic growth.This article is based on China’s monthly data from January 2010 to December 2022.We empirically investigate the mechanisms and time-varying effects of financing structure dissimilation on economic growth using entropy weighting method,mediation effect model,and TVP-SV-VAR model guided by financial structure theory,pecking order theory,and financial accelerator theory.The main conclusions are as follows:(1)The impact of financing structure dissimilation on economic growth and the mediation effect of financial stability and bank credit stability in this process.Through empirical analysis,it was found that traditional financing structure,shadow structure of financing,and financing structure shadowing all affect economic growth by influencing financial stability.Firstly,the traditional financing structure has a positive impact on economic growth and can promote economic growth by enhancing financial stability,while the mediation effect of bank credit stability is not established.Secondly,only when the shadow structure of financing is at a moderate level,it can promote economic growth by enhancing financial stability and bank credit stability.This indicates the existence of a threshold effect of shadow structure of financing,where a moderate shadow structure of financing can promote economic growth by enhancing financial stability and bank credit stability.Thirdly,only when the financing structure shadowing is at a too low or too high level,it will have a significant negative impact on a country’s economic growth.Low financing structure shadowing will reduce financial stability and thus have a negative impact on economic growth,while high financing structure shadowing will have a negative impact on both financial stability and bank credit stability,leading to a negative impact on economic growth.Fourthly,the heterogeneity of financial stability results show that the traditional financing structure mainly promotes economic growth by enhancing the stability of the bank market and the securities market.At a moderate level of shadow structure of financing,it primarily promotes economic growth by enhancing the stability of the insurance market and the trust market.Lower levels of financing structure shadowing mainly have a negative impact on economic growth by reducing the stability of the securities market,insurance market,and trust market,while higher levels of financing structure shadowing mainly have a negative impact on economic growth by reducing the stability of the trust market.The heterogeneity of bank credit stability results shows that the traditional financing structure mainly promotes economic growth by enhancing traditional credit stability.At a moderate level of shadow structure of financing,it primarily promotes economic growth by enhancing shadow credit stability,while higher levels of financing structure shadowing mainly have a negative impact on economic growth by reducing shadow credit stability.(2)Time-varying effects of financing structure dissimilation on economic growth.The empirical model uses a time-varying parameter vector autoregression model containing stochastic volatility.Firstly,regarding the time-varying effects of the traditional financing structure on financial stability and economic growth,the current traditional financing structure has a positive impact on economic growth,while in the short and long term,it has a negative impact on economic growth.Regarding the time-varying effects of the traditional financing structure on bank credit stability and economic growth,the traditional financing structure is negatively correlated with economic growth at three different lead times.In terms of the time-varying effects of the shadow structure of financing on financial stability and economic growth,in the short and medium term,shadow structure of financing has a positive impact on financial stability,and the current shadow structure of financing has a positive impact on economic growth,but in the short and medium term,it has a negative impact on economic growth.In terms of the time-varying effects of the shadow structure of financing on bank credit stability and economic growth,the current shadow structure of financing has a positive impact on economic growth,but in the short and medium term,it has a negative impact on economic growth.Regarding the time-varying effects of the financing structure shadowing on financial stability and economic growth,it shows a positive impact in the short term,while in terms of its effect on bank credit stability and economic growth,it has a negative impact in the long term.Secondly,considering the perspective of heterogeneity analysis,the impact of traditional financing structures varies across different periods.Traditional financing structures exhibit a positive influence on the stability of the banking market but have a negative effect on the stability of the trust market.In the short term,they also negatively impact the stability of the insurance market.Furthermore,the response value of traditional financing structures to the stability of traditional credit is negative at different periods,while the short term response value to the stability of shadow credit is positive.Examining the shadow structure of financing,it is observed that,during different periods,it has a positive effect on the stability of the securities market and a positive impact on the stability of the banking market in the short and medium term.However,it negatively affects the stability of the insurance market in the short term.In the short and medium term,the shadow structure of financing positively influences the stability of traditional credit,while its response value to shadow credit stability shows a negative trend in the short term.Turning to financing structure shadowing,its impact on the stability of the banking market reveals a pattern of short term negative impact medium and long term positive impact.On the other hand,it shows a short term positive impact but a medium and long term negative impact on the stability of the trust market.In the short term,financing structure shadowing has a positive effect on the stability of the insurance market,whereas it exerts medium and long term negative effects.Additionally,financing structure shadowing negatively impacts the stability of shadow credit at different periods,while it negatively affects the stability of traditional credit in the short term and positively influences it in the medium and long term.The innovation of this research lies in three aspects.Firstly,unlike traditional literature,this article further divides financing structure dissimilation into shadow structure of financing and financing structure shadowing,to comprehensively distinguish different types of financing methods.Focusing on this aspect,the article explores the impact of financing structure dissimilation on economic growth and its time-varying effects based on traditional financing structure research.This provides new perspectives and methods for in-depth research on the impact of financing structure on economic growth.Secondly,the research focus is further expanded to the aspects of financial stability and bank credit stability.The roles of financial stability and bank credit stability in the impact of financing structure dissimilation on economic growth differ,and focusing solely on financial stability may not fully reveal the impact mechanism and time-varying nature of financing structure dissimilation.Therefore,this article introduces bank credit stability factors to reveal the mechanism of action of financial stability and bank credit stability in the impact of financing structure dissimilation on economic growth.This expands the scope and perspective of financing structure research and provides a new framework for understanding the impact mechanism of financing structure dissimilation.Thirdly,this article uses a time-varying parameter vector autoregression model for empirical analysis,considering the time-varying nature of coefficients and random disturbance variance,making the model more consistent with economic reality.The nature of time-varying parameters is conducive to better capture the time-varying relationship between variables,and can provide a clearer analysis of the impact of traditional financing structure and financing structure dissimilation on economic growth.This study extends the traditional static estimation method to dynamic time-varying estimation method,revealing the dynamic adjustment process between economic variables,further deepening the understanding of the impact of financing structure dissimilation.There are still some shortcomings in the empirical analysis of the impact of financing structure dissimilation on economic growth.First,while this paper provides an in-depth analysis of the relationship between financing structure dissimilation and economic growth,it does not explicitly define the optimal financing structure.Related studies remain at the level of linear relations,and much work is needed to continue the exploration.Second,whether the impact of financing structure dissimilation on financial stability,bank credit stability,and economic growth is different depending on industry attributes,institutional context,and macroeconomic environment,these questions require deeper exploration in future research.Moreover,there are many transmission pathways between financing structure dissimilation,financial stability,bank credit stability and economic growth,and further exploration is needed to examine the nonlinear effects between variables in the time-varying parameter vector autoregressive model.