The Research Of Financial Development’s Effect On The Industrial Structure Adjustment Effect Of FDI

Accelerate transformation of the mode of economic development is the backboneof the12th Five-Year Plan Period. The adjustment of industrial structure is the basicrequirement of the transformation of the pattern of economic development. AfterChina’s reform and opening up, China’s industrial restructuring has made significantprogress. The first industry in the proportion of GDP continues to decline, the two orthree industry proportion is rising. The adjustment of industrial structure needs to relyon technological progress and innovation. China’s technical level and innovationability are limited, the introduction of FDI and make full use of the spillover effectsof FDI have become one of the leading factors to promote China’s technologicalprogress and industrial structure adjustment.Influence of FDI to our country industrial structure can be divided into directeffect and indirect effect. Direct impact refers to the increase of FDI directly increaseavailable funds and the industry’s size increase immediately. Indirect effect refers tothe influence of the spillover effects of FDI to the industry. Association of industry,technology and management experience of imitation, the employee mobility promoteindustry technology progress and the improvement of labor productivity and affect thedevelopment of non-use of foreign capital industry. Whether it is a direct impact onthe industrial structure or indirect effect, the effect of FDI on the adjustment ofindustrial structure depends on the certain conditions. Efficient financial market anddeveloped financial service system not only directly affect the scale of the FDI, butalso influence FDI spillover effect. It can be said, foreign policy can affect theindustrial structure by influencing the direction of FDI, but the level of developmentof domestic financial market will determine the impact of FDI on China’s industrialstructure. In this context, study financial development’s effect on the industrialstructure adjustment effect of FDI and hope to provide theoretical reference to realizethe transformation of the mode of economic development.This paper firstly analyze the impact of financial development, FDI and theirinteraction on the adjustment of industrial structure theoretically and then establishtwo kinds of regression models: considering the financial development variable andnot considering financial development variable. Through the contrastive analysis ofthe regression results of two models, studying the effects of financial development onFDI from a macro point of view. Analyse the specific case from the microcosmic angle. The research results show that FDI and financial development is conducive tothe adjustment of industrial structure. FDI’s effect to the industrial structure isaffected by the level of financial development. China’s financial development is notperfect and the efficiency of resource allocation of financial market is low, whichhinder the development of enterprise technology innovation. The effect of FDI onChina’s industrial structure adjustment is limited. In addition, the microscopic analysisalso shows that the regional financial development also actively promote FDIspillover effect. Therefore, our country must actively develop the domestic financialmarket. Through the innovation of financial products and services improve theefficiency of the allocation of resources in financial markets. FDI promotes thedevelopment of micro industries and realizes the upgrading of industrial structure ofthe macroeconomic goals.