The Effect Of The Improvement Of Financial Structure On The Upgrade Of Economic Structure

The financial development be showed as the increase in total amount of financial assets and financial institutions on one hand, and be showed as the adjustment and improvement in structure of financial assets. Usually the increase in total amount of financial assets reflects the economic growth; in certain degree, the transformation of financial structure reflects the layer of financial and economic development and the depth of upgrade in industrial structure.So this paper make study from the angle in the coordination between improvement of financial structure and upgrade of industrial structure.For studying in financial structure, this paper firstly introduces the exsiting theories and points. Then I use the FIR to analyze the financial development and the transformation iof financial structure. In the anlysis of financial depth degree, most literatures use M2/GDP as FIR, acturally this expression is different from the expression of Goldsmith and it magnifies FIR of china. According to expression of Goldsmith, this paper uses the amount of entity assets calculated by exsiting data and compute FIR of china from 1978 to 2003.In exsisting literature, most study concerns the demonstration anlysis of the relationship between the financial structure and economic growth. The adjustment of industrial structure is an important fact for economic growth. Enlarge the share of the third industry in GDP is good for economic growth. Only when the improvement of financial structure is suit for the need for upgrade of entity economic, it can promote economic growth. This paper studies the effection of the improvement of financial structure to the upgrade of economic structure.This paper makes the anlysis of upgrade of economic structure from two angles---the industrial structure and the ownership structure.The main difference of industrial structure between China and other countries which has similar development level is that the share of second industry in GDP is too high and the share of third industry in GDP is low.When use the share of second industry and third industry in GDP as explained variable and the share of non-monetary financial asset in total financial assets, I make the regression equation and can get the conclusion that underα=0.1, there is positive relatioanship between the improvement of financial structure and the upgrade of industrial structure,and the coefficient is 0.76. But there is no effect on the development of third industry as the financial structure improving.The financial resource the nonstate-owned economic get is not match with the contribution it make to the economin growth. In china,the nonstate-owned economic has become the main power for the upgrade of industrial structure.The nonstate-owned economic is the key fact to help developing the third industry.So the adjustment of ownership structure is good for the upgrade of industrial structure.Combined with the analysis of ownership structure in the second and third industry, it showes the recent improvement of financial structure has no positive effect on the nonstate-owned economic, and the financial resource gived to nonstate-owned economic by the quick development of security market is not enough.The improvement is not only simply develop the security market and encourage the direct financing, this simple development can not make positive effort for the upgrade of industrial structure. Before encouraging developing the direct financing for the purpose to improve the financial structure, the most importance thing is to resolve the problem of deflection.In the main board, it should decline the doorsill for the nonstate-owned enterprise going public and support transforming the state-owned share of listed companies of state-owned to nonstate-owned enterprise. At the same time to develop the small and medium-sized enterprises Board, it should establish the growth enterprise market as soon as possible. As considering the actuality, it should encourage the small and medium-sized financial institution to support the development of the nonstate-owned enterprise.Then after the state-owned going public, they should positively change their opinion and make the maximum of sharehold interest to be the main operating aim.