The Impact Of Financial Development On Industrial Structure Adjustment In Northern Xinjiang

Since Xinjiang has been determined the core area of the economic zone of Silk Road Economic Belt, Northern Xinjiang has great potential for economic development in the future. The industrial structure of Northern Xinjiang needs accelerate the pace to adjust to economic development goals of the new era. By the end of 2014, Xinjiang’s GDP achieves 926.41 billion, while northern Xinjiang achieves 769.953 billion of which accounts for 83% of Xinjiang. Therefore, the study of industrial structure adjustment around the northern state has certain practical significance to achieve industrial restructuring and upgrading. Finance is the indispensable driving force of industrial restructuring through capital formation mechanism, money-oriented mechanism, the catalytic mechanism of credit risk management mechanism to guide the flow of funds, do internal economic structure, promote industrial restructuring and upgrading, contribute to economic development. So this paper focuses on the financial development on industrial restructuring of northern Xinjiang.This paper selects Urumqi, Karamay, Changji Autonomous Prefecture(hereinafter referred to as "Changji"), Yili Autonomous Prefecture(hereinafter referred to as "Yili"), Boertala Mongol Autonomous Prefecture(hereinafter referred to as "Bo Zhou"), Altay Region 6 prefectures for the study, use fixed effects model of 2005--2014 panel data of six prefectures to study the effect of financial development on industrial restructuring. Select the scale of finance and financial efficiency which reflect the level of financial development as explanatory variables. Select other factors that affect the selected industrial restructuring, including the level of investment in fixed assets, the openness, the level of government spending as three control variables. Use fixed effects model do empirical analysis. The results showed that: Financial scale adjusts the industrial structure significantly, while financial efficiency is not significant. The order of degree about influence on the industrial structure adjustment from high to low is the level of government spending, the openness, the level of investment in fixed assets. The degree of openness plays a catalytic role, while the level of physical investment and the level of government spending do conversely. From the degree the overall financial development influence 6 regions, it shows that the order from high to low is Karamay, Bozhou, Urumqi, Changji, Altay region, Yili. Financial development plays a catalytic role for Bozhou, Altay, while does converse role Karamay, Urumqi, Changji, Yili.According to the empirical results, this paper puts forward policy recommendations from the financial and industrial policy-oriented: Build multi-level capital market and play Policy Finance’s role to expand financial scale. Increase financial support for service industry and high-tech industries to improve financial efficiency. Exert guiding role of government to ensure that investment in fixed assets agree with the direction of industrial restructuring. Continue to expand import and export trade-led to upgrade industrial structure. Change the government functions from the management model to service model in to improve the utilization of funds.