Research On The Impact Of Financial Capital And Financial Structure On Regional Innovation Capability In China

The innovation capability of a country plays an important role in promoting coordinated economic development, improving people’s living standards and keeping stable social development. The 11th Five-Year Plan for the Development of Science and Technology clearly puts forward that we should highlight innovation, deepen reform and accelerate the construction of national innovation system. The government work report of 2015 also proposed "Mass Innovation, People Entrepreneurship". Innovation, as a key element of a country’s competitiveness, has been the "engine" of economic development. And the financial impact on innovation becomes more and more strong. The development of a country or an enterprise must rely on innovation, and innovation must have financial support. Therefore, research on the relationship between finance and innovation in order to achieve a combination of innovation and finance is of great significance to promoting economic development. The purpose of this article is to study the impact of financial capital and financial structure on regional innovation capability, and to put forward the corresponding opinions and suggestions, which can provide reference for regional innovation policy and financial policy.Firstly, this article summarizes the domestic and foreign theory and literature on innovation, financial capital and financial structure. On this basis, we establish the initial model of the study. Then, based on the theoretical analysis and empirical analysis results, we try to optimize the model and choose the best one. By the optimal model, we empirically explore the difference of regional innovation capability and its influencing factors in the eastern, central and western. Finally, according to the empirical results, we put forward policy suggestions correspondingly. Considering the lack of existing research literature about the relationship between finance and regional innovation capability, the article expands the research literature of financial capital and financial structure and extends the research framework about regional innovation capability. Besides, the divided area research enhances pertinence and accuracy, which makes the empirical research conclusions and suggestions suitable for different areas. Meanwhile, the article considers lagged variable to optimize the model, which enhances the reliability of the test model.In this paper, the empirical analysis has the following conclusions:(1) Nationwide, the innovation capability is in a low level, but appears a tendency of gradually rising year by year. About the influencing factors, financial capital and financial structure can improve innovation capability, and the substance capital and cultural factor also have a positive impact on innovation capability. But the relationship between labor capital and innovation capability is negative correlation. Considering the current situation of higher education in our country, we think the reasons for this phenomenon as follows:rigid examination-oriented education mode, the lack of scientific research funds, the neglect to research and innovation because of educational utilitarianism, disconnection between education and innovation practice. (2) Based on the discussion on divided area, the eastern region is better than the other two regions on the regional innovation capability, financial capital and financial structure. About the influencing factors, in the eastern region, financial capital, financial structure, substance capital and cultural factor can improve the regional innovation capability. The relationship between labor capital and regional innovation capability is negative correlation; In the central region, the relationship between financial capital, financial structure, cultural factor and the regional innovation capability is not significant. But substance capital and labor capital can improve the regional innovation capability; In the western region, the relationship between financial capital, labor capital and regional innovation capability is significant positive correlation. And the relationship between financial structure, substance capital, cultural factor and the regional innovation capability is not significant.Based on the analysis of the above empirical results, this paper puts forward the following suggestions:(1) To strengthen financial institutions risk control level and the construction of regional financial system. That includes the following steps:To perfect the risk control system; To develop the third-party financial loan guarantees; To innovate financial products; To absorb the social capital, etc. (2) To develop the multi-level capital market and optimize the financing environment for innovative enterprises. That includes the stock market and the bond market. (3) To perfect the financial laws and regulations. Considering the different situations of the eastern, central and western region, the above suggestions are different. Besides, based on the empirical analysis results, this article also puts forward the improvement suggestions about substance capital, labor capital, cultural factor correspondingly.