A Study On Financial Development Support To Industrial Inter-district Transfer Of Processing Trade In China

Since the reform and opening, processing trade which plays a key role in economy growing,trade developing, technology improving and employment, is a very important way to participate inthe global division of labor for our country, and it has been an important engine to pull economygrowing and society developing in all areas in China, especially in eastern coastal areas. As theeconomic environment changing at home and abroad, transforming and modifying the industrialstructure is an extrude problem for China’s processing trade, of which the comparative advantageis weakening in eastern coastal areas. History has shown that a new round of processing tradeindustrial transfer is the breach to modify the structure of processing trade. And the substance ofprocessing trade industrial transfer is transferring of capital among industries, departments andenterprises. So the development of finance plays a key role in process of modern industry transferwhich depends on the support of finance department. In this context, how finance to pullprocessing trade transfer and carrying on is a key task for processing trade transferring from theeastern coastal areas to the Midwest. Based on the theory of financial development, industrial shiftand processing trade, and focusing on the processing trade transfer, coordinating with financedevelopment in China, this paper explores the influence of China’s finance development toprocessing trade inter-district transfer with theory analysis and empirical study.This paper includes five chapters, reading as follow:ChapterⅠis introduction, which states the backgrounds, significance, research approach andpresent research. Base on the theory of finance development, industry value chain, division of workin industry and industry transfer, ChapterⅡanalyses the relationship between finance developmentand processing trade transfer, and establish a theoretical framework on how finance developmentinfluence processing trade transfer, which is the theoretical base for empirical study. ChapterⅢanalyses the current situation and measures the extent of China’s finance development andprocessing trade inter-district transfer. Base on the above work, we describe the relationshipbetween China’s finance development and processing trade inter-district transfer. In ChapterⅣ,China has been divided to four region as East region, Central region, West region and Northeast,and then we empirically study the influence of regional finance development to processing tradetransfer in different regions with unit root test, Cointegration Test and GMM on panel data. At last,this dissertation comes to conclusion from the theoretical analysis and empirical test in previous chapters, and points out the corresponding policy recommendations to pull the transfer ofprocessing trade and modify the industrial structure.