Empirical Study On The Effects Of Financial Development On Technological Innovation

The society has entered the era of knowledge economy. Technological innovationhas become the core power of the economic growth. It has become the internal powersource and the dominant of a country’s economy. Our country has made a strategic goalof building an innovative country. As an important part of modern economic life,financial penetration and the increasing influence of technological innovation. Financialdevelopment has become an important part of technological innovation. In order topromote our country’s technological innovation and then maintain sustained economicgrowth. It is necessary to study the influence of financial development on technologicalinnovation.Based on the theory of the impact of financial development on technologicinnovation, adopting the combination of normative analysis and empirical researchmethod, to study the effect of financial development on technology innovation. Indescriptive analysis, the paper respectively from the function of the financial system andthe process of technology innovation to conduct a comprehensive analysis. In theempirical part, this article selects the financial related rate as a measure of the degree offinancial development indicators, with patent grant as the measure of technologicalinnovation. At the same time, introducing the variables as government intervention,R&D funds and researchers, based on the data of our country’s30provincial areas from1999to2010, we use the panel data to estimate, the conclusion as follows: our country’sfinancial development has a significant positive role in promoting technologyinnovation; and the government intervention had no significant effect on technologyinnovation, it doesn’t mean that it is unimportant. Its influence on technology innovationcannot be ignored. R&D funds and researchers all have a significant role in promoting.At last according to the theoretical analysis and empirical results. Combined with thefinancial support of the technological innovation in our country, we give somesuggestions from the financial institutions, government investment, building enterprisecredit system, financial services, construct a multi-level system of financial organization,financial laws and regulations, ultimately to promote the development of technology innovation.In this paper, on the basis of existing research,we have a try as follows: first, try toanalyze from the perspective of the process of technological innovation. Second, inempirical studies of financial development on the impact of technology innovation, usethe method of the panel data to estimate. But we still have some deficiencies. We needto focus on the further study in such places: the influence factor of technologicalinnovation is far more than in several aspects such as R&D funds and researchers. Thereare some other factors such as FDI, the level of education and the protection ofintellectual property rights. These will affect the technological innovation. We shouldconsider them in the construction of financial development on the impact of technologyinnovation model.