Research On The Influence Of The Upgrading Of Industrial Structure Of Financial Development

Finance is the core of modern economy, which plays a prominent role in optimizing resource allocation and promoting the upgrading of industrial structure. The introduction of Jiangsu "12th Five-Year" Guideline and the national industrial restructuring directory means that the current economy of Jiangsu is facing transformation and upgrading. Under this background, it is of strong theoretical and practical significance to study how the finance better supports Jiangsu industrial upgrading and drives its economy development.Based on a review of related literatures, this paper studies the effect of Jiangsu financial development on the upgrading of industrial structure adjustment from the view of theory and positivism. The main research of this paper focuses on the following:On the theoretical research, first of all, this paper analyzes the influence transmission mechanism and the general mechanism of action of financial development on the upgrading of the industrial structure, the influence mechanism of bank credit and capital markets on the upgrading of the industrial structure as well as a theoretical model. Second, this paper respectively summaries and evaluates two kinds of financial development model on the support of upgrading of the industrial structure-bank-based and capital market-oriented, as international experience for reference.In the descriptive analysis, this paper detailedly analyzes the effect of financial development on upgrading of industrial structure in Jiangsu Province respectively from four angles of fixed-asset investment, bank credit market, capital market and the use of foreign capital. The study finds that the changing trend of fixed-asset investment structure is basically in accordance with that of the industrial structure in Jiangsu Province, the investment income of the second industry and third industry is higher. The bank credit inputs of the three industries contribute significantly to their industry development, but the credit structure and industrial structure appear a certain degree of deviation. The industry structure of public companies in Jiangsu represents Industrial-driven. The industry structure of public companies in Jiangsu represents Industrial-driven. The listed companies of new industry and modern service industry are on the low side. However, there still exists a certain gap in comparison with that of three major industries and it fails to reflect the evolution direction of industrial structure. The access of foreign capital has promoted technological progress and upgrading of the industrial structure in our province.On the empirical research, this paper collects relevant historical data of Jiangsu Province between1986and2010. We investigate financial development from the financial scale, financial structure and financial efficiency in three aspects. We choose financial related rate, financial structure ratio, loan-to-deposit ratio and financial output rate as explanation variables respectively, while we select the upgrading rate of the industrial structure as an explained variable. Then we build econometric models to analyze the effects of financial development on the upgrading of the industrial structure in Jiangsu Province. We conclude that both financial related rate and financial output rate can promote the upgrading of the industrial structure. In the short term, financial structure ratio and loan-to-deposit ratio fail to support the upgrading of industrial structure; whereas they can speed up the upgrade of industrial structure with greater effect in the long run. Then we learn that financial structure ratio and loan-to-deposit ratio play a supporting role in upgrading the industrial structure in our province with a certain lag.Finally, this paper puts forward some corresponding policy suggestions:strengthen the integration of financial capital and industrial capita; establish a sound financial service system; set up multi-layer capital market system to broaden the financing channels; construct the venture investment system as soon as possible; strive to develop Sci-Tech Finance. Under the background of economic transformation and upgrading, we provide some useful guidance on how to better make financial development play a constructive role in the upgrading of the industrial structure in Jiangsu Province.