Research On The Impact Of Financial Development On Technological Innovation

As China begins to enter the period of the new normal economic, the importance of technological innovation is becoming more and more significant. Especially in recent years, the development of technology innovation has increasingly become a powerful engine of China’s economic growth. In its implementation process, whether in the initial stage of research and development, or the final stage of product, the realization of technological innovation requires a lot of financial support, and these funds often need to get through the financial market financing. This indicates that the development of technological innovation in our country cannot be separated from financial development, so it has important theoretical and practical significance to study the impact of financial development on technological innovation.By combing the relevant literature, we find that the existing literature tends to be limited to the research of the development of banks and stock markets, but takes little consideration of the impact of other institutions in financial markets on technological innovation. Taking the limitations into account, this paper extends the previous perspective of financial development into five aspects:bank, stock market, bond market, insurance market and comprehensive financial market. Then The paper uses the dynamic panel model to analyze the impact of various financial market’s development on technological innovation in the whole country, the eastern, the central and western provinces.Empirical research shows that, from the perspective of the national level (full sample), the impact of bank scale, bank structure, stock market development, insurance market development and integrated financial scale on technological innovation is negative. From a regional perspective, this paper finds that financial institutions in different regions have different impact on technological innovation. From the bank’s point of view, the positive influence of bank size and bank structure on technological innovation is only in the central part of China. From the stock market point of view, the stock market development in the eastern and western regions of China has failed to promote the local technological innovation, especially in the western region of China. From the perspective of bond market, the impact of bond development on technological innovation in all regions is not significant, and the positive influence of bond development on technological innovation is only in the eastern and western regions. From the perspective of the insurance market, the insurance market development in the eastern、central and western regions of China has failed to promote local technological innovation, especially in the western regions. From the perspective of comprehensive finance, the positive impact of integrated financial scale on technological innovation is only in the central part of China. It can be seen that there are significant differences in the effects of financial development on technological innovation in different regions. Therefore, in order to promote technological innovation in China, different regions should develop corresponding financial support policies according to their actual situation.