The Influence Of Capital Market On The County Economic Development

The county economy is the regional foundation and basic operating unit of the national economy,and an important component of national and local economic development.With the implementation of the rural revitalization strategy and the promulgation and implementation of the national "Rural Revitalization Promotion Law" after the 19 th National Congress of the Communist Party of China,promoting the county economy to a higher level of development has become a widely studied topic in both social and theoretical research.At the same time,the capital market is regarded as a barometer of economic development.In the new era,how to use the development of the capital market to promote the sustainable and stable development of the county economy is a topic worthy of in-depth research.To study this topic,it is necessary to understand how the capital market affects the development of the county economy.To clarify its mechanism of action,it is necessary to understand the development process of thecapital market and the current development status of the county economy,and to clarify the mechanism of the capital market’s impact on the development of the county economy.The main contents of this research include three aspects: Firstly,analyzing the capital market and economic development in China’s counties.By using data from the Securities Times Terminal on national county-level listed companies over the past 30 years,the development process of China’s capital market is analyzed.Then,using data from statistical yearbooks to analyze the current state of county-level economic development in China.Finally,an empirical study was conducted on the economic development types of 2,082 counties in China in 2018,based on multi-source data such as satellite remote sensing,Baidu POI,and statistical yearbooks.Secondly,theoretical analysis was conducted on the impact of the capital market on county-level economic development.Through a comprehensive analysis of the mechanism of county-level economic development under the influence of the capital market,a model of the mechanism of the capital market’s impact on county-level economic development was proposed,using three intermediate variables: consumer demand,investment demand,and industrial structure.Thirdly,empirical research was conducted on the impact of the capital market on countylevel economic development.A total of 266 non-municipal counties with listed enterprises nationwide were selected as the research objects.The capital market measurement index of county-level economic development was obtained using data from the Securities Times Terminal on all listed companies in the relevant counties in 2018.The model proposed was analyzed for heterogeneity from the perspectives of countylevel economic development types and regions.The research results show that:(1)There exist regional disparities and spatial imbalances in the economic development of China’s counties,with the economies of counties in Jiangsu,Zhejiang,and Shandong provinces being the most advanced,and those in the eastern counties surpassing those of the west.Based on variations in development patterns,all non-municipally governed counties in China can be categorized into five types: ecologically dominated,industrially dominated,balanced development,livestock-dominated,and agriculturally dominated.(2)Empirical studies focused on nonmunicipally governed counties nationwide reveal that in the mechanism of how capital markets influence county economic development,consumer demand,investment demand,and industrial structure play mediating roles.Among these,the mediating effects of consumer and investment demands are significant,while that of the industrial structure is not.(3)Empirical research on counties of different development types finds that in industrially dominated counties,the mechanism of how capital markets influence county economic development through consumer demand,investment demand,and industrial structure aligns with the findings on a national scale.However,for other types of counties,the mediating effects of all three variables are not significant,indirectly corroborating the supporting role of industry in the national economy.(4)When examining counties governed by different regions and dividing them into eastern,central,and western types,regional heterogeneity is evident.The model regression results of eastern counties are consistent with studies focusing on counties nationwide,central counties show significant mediating effects only for investment demand,whereas all mediating effects are not significant in western counties.There is a high degree of consistency between eastern counties and industrially dominated counties,which corresponds with the more advanced economic reality in eastern China.This article presents three main innovations:(1)The authors divided the countylevel economic development types in China based on multiple data sources.By using satellite remote sensing,Baidu Map POI,Statistical Yearbook,and other data sources from four dimensions including social and economic development,land use,tourism development,and ecological environment,this study identified the primary factors affecting county-level economic development in China.Compared with previous studies that had narrow research objects and limited classification standards,this study provides a more comprehensive and objective approach to the classification of county-level economic development types in China.(2)The authors established a mechanism model that explains how the capital market promotes county-level economic development.This mechanism model proposes that capital markets can stimulate consumption demand through the wealth effect,enhance investment demand through complementary capital gains and losses and enhanced economic entity expectations,and promote industrial structure adjustment and upgrading by adjusting increment and stock.This model is significant for guiding the development and improvement of the capital market system to promote economic development in different regions.Previous studies mainly focused on the effects of the capital market on county-level economic development from the perspectives of agency,innovation,and technological progress,but rarely analyzed the comprehensive mechanism of how the capital market affects county-level economic development through consumption demand,investment demand,and industrial structure.(3)The authors revealed the heterogeneity of the capital market’s transmission mechanism on county-level economic development.They found that the effects of the capital market on county-level economic development vary for different development types and spatial regions,and this study provides scientific and reasonable suggestions for the development of county-level economy in different types and regions.Previous studies on the spatial heterogeneity of county-level economic development often neglected the heterogeneity of the interaction between space and development types.This study found differences in the capital market level,economic development level,and the effectiveness of their interactions among different types and regions of county-level economies.These findings can help regions to make reasonable use of the capital market to promote economic development and avoid blind construction.