An Empirical Study Of Financial Development And Industrial Structure Adjustment In China

The economic development histories of the countries worldwide indicate that economic growth and financial development are closely related. The study of relationship between financial development and economic growth can be traced back to the earliest Bagehot and Schumpeter. The early economists think finance has played an very important role in the course of economic development, and explained from perspectives of industrial revolution, innovation and entrepreneurs'ability. Despite of many controversials about financial development and economic development, but generally speaking, both economists or policy makers are inclined to think that, the financial system has an important impact on economic growth. Especially after the World War II, the so-called economic miracles of Japan and Germany, proof that the financial system has a great role in the development of a country's economy powerfully. Furthermore, the financial system leds to economy development by virtue of industries.The process of economic development is not only just for the enlargement of the scale of the economy, the improvement of national income, but also the continued optimization process, especially the industrial structure adjustment and upgrading to meet market demands. Upgrading of the industrial structure indicates that the quality of economic development, a reasonable degree of industrial structure is a crucial factor in maintaining long-term economy development.. Many country's are facing structural problems ,which affects the country's economic development, China is facing the mandates of economic development and the institutional transformation, structural problems in China's economic development are more prominent. In the process of China's economic development, industrial structure imbalances in China's economic development is the deep-seated causes of instability., the only way to enhance competitiveness and realize economic development healthily, is optimizing the industrial structure, promoting industrial upgrading.Funds is the direct impetus to ensure that adjustment of the industrial structure, promoting industrial upgrading. With the improvement of China's market economy, the nations investment has changed into finance-oriented type from the previous government funding-oriented type. Finance is the core of the market economy, an important mechanism to realize industrial restructuring, and plays an important role in resources rational distribution and flowing from industries, sectors, and regions. We are facing the every important issue: how to exert the active role of finance to rationalize the resource allocation, push the adjustment of industrial structure and prompt the economic development.The dessertation is divided into four parts, focusing on the finance's effects on industrial adjustment, in the spirits of industrial structure, theory of capital ,theory of financial development, established the theory frame of finance, proposed a theoretical model on the above issue, then did an empirical study by using cointegration test, Granger testing, error correction model, and principal component analysis. draws the following conclusions:1. The financial intermediary, which is centered on the banking credit market, used to push the industrial structure adjustment, especially in the banking-dominant countries. The adjustment of industrial structure is directly influenced by the credit structure. The case study indicates that the financial intermediary used to influence the change of industrial structure. On one side, it leds to the imbalance of industrial structure due to the inefficiency of resources allocation.2. The security market, especially stock market is one of important access to industrial structure adjustment, which is influence by the remaining and increasing parts of stock market. Due to the immaturity of China's stock market, the active effects on industrial structure adjustment has not yet exerted.3. Financial innovation is the driving force for financial development, which has played an important impact on the industrial structure adjustment. Due to the distortion of markets and financial system, the active effects on industrial structure adjustment has not yet fully exerted.