| In recent years, China's economic development has made remarkable achievements and become very influent in the development of the global economy. Both its size and speed are in the forefront of the world. However, with the deterioration of the global economy, China's economy has entered the new normal situation because of the export and other factors. It's not workable for us to continue the extensive overcapacity and environmental pollution, which are caused by the unreasonable industrial structure. In addition, the country also stressed the importance of the environment in the process of developing the economy. This requires us to promote the industrial structure upgrading and transform the mode of economic growth, which is ultimately to realize the sustainable economic growth.Resources will inevitably reconfigure between industries in the upgrading process of industrial structure, and its efficiency is directly related to the upgrading of industrial structure. The nature of finance is to circulate funds and allocate resources and it has funtions of mobilizing savings, managing risk and facilitating trade. Its own character determines the importance of financial development on the industrial structure upgrading. In the current economic situation, where the economy is turning down and the industrial structure is not reasonable, to promote the industrial structure upgrading has become the breakthrough of stablizing the economic growth, and finance will play an important role in this process. So how does finance influence industrial structure upgrading? More and more scholars and government departments pay attention to the problem.The research on the influence of financial development on the upgrading of industrial structure comes from the field of financial development and economic gowth. After the consensus on the relationship between financial development and economic growth, scholars explore the causal relationship between then from different kinds of angles. Some study it from the industrial perspective. Nowadays, most literatures measure the industrial structure upgrading from the three industry, and there are few scholars from the angle of factor input. Some scholars have pointed out that we should not only pay attention to the surface of the industrial structure upgrading, but also pay more attention to the quality, such as Fangzhao Zhou etc. (2013). By comparing the two aspects, we thinks that the method of production factor classification can describe the upgrading of industrial structure more exactly. Therefore, this paper studies it from theoretical and empirical aspect.In theoretical section, this paper firstly introduces the meaning of financial development and industrial structure upgrading. It also points out that we should pay attention to the depth and thickness of financial system and the quality of the industrial structure upgrading. Then it analyzes the main functions of financial system and the factors which influences industrial structure. On the basis of this, this paper elaborates the five theoretical mechanisms by which financial development impacts the upgrading of industrial structure. At last, we analyze the theory of financial development's influence on the upgrading of industrial structure from the perspective of factor intensity, and puts forward the hypothesis of this paper, namely that financial development can promote the industrial structure upgrading from resource and labor intensive dominated to capital and technology intensive dominated, which is exhibited by the rising proportion of capital-intensive and technology-intensive industries in the whole economy.In empirical section, firstly, this paper chooses the inter provincial panel data in view of the obvious difference of each province on financial development and industrial structure, and we use the data of 31 provinces in 2005-2011 as sample because of missing datas. Secondly, considering the industrial structure with big inertia, this paper adds the previous industrial structure as an explanatory variable to the model and constructs a dynamic panel model. What's more, we select the variables and introduce the selection method, the specific meaning and metrics. To measure the status of the industrial structure upgrading from element concentration, the industry is divided into resource intensive, labor intensive, capital intensive and technology intensive to construct the index of industrial structure upgrading. Generalized method of moments (GMM) is used for the regression analysis of measurement method and it has many advantages such as less assumption. This method consists of two kinds, namely differenced GMM and system GMM. According to the situation of sample, we select the latter. In the end, explained variables are the industrial structure upgrading; explanatory variables are one-year lagged industrial structure upgrading; core explanatory variables are financial development; and control variables are consumption structure, fixed capital formation rate, foreign direct investment, government spending and per capita GDP. What's more, in order to study the impact of financial development on the upgrading of industrial structure fully, this paper measures the level of financial development from the perspective of activity and scale, and makes the regression analysis separately.Through empirical analysis, the main conclusions of this paper are as follows. Firstly, current industrial structure is largely influenced by the one-year lagged one, which shows that industrial structure has a strong inertia. At the same time, it also shows that we should promote the upgrading of industrial structure according to the law. Secondly, from the angle of activity, financial development has a significant role in promoting the upgrading of industrial structure; from the angle of scale, financial development has a positive effect on the upgrading of industrial structure, but not significant. Empirical conclusions basically verify the hypothesis and show that the extensive growth of financial development doesn't necessarily promote the upgrading of industrial structure. More attention should paid to the depth and thickness of financial system. Finally, this paper tries to explain it from the aspect of missing data.According to theoretical analysis and empirical results, this paper puts forward the following policy recommendations. Firstly, the government should raise the management efficiency and professional level of commercial banks by the introduction of appropriate competition. Secondly, the capital market should be improved to support the high-tech industries better. Thirdly, industrial investment funds should be introduced to enhance financial service for industrial structure upgrading. Lastly, the government should encourage venture capital to strengthen the combination between financial capital and technological innovation.There are the following innovation points in this paper. Firstly, foreign scholars mostly use the foreign data for OECD countries and rarely involve China's data. The native research usually chooses the whole country or specific province as the object. However, this paper uses the provincial panel data as sample considering the obvious difference between provinces' situation. The research results of this paper has the certain reference value and guiding siginificance. Secondly, most domestic scholars use the three industry classification to measure the industrial structure upgrading. Nevertheless, this paper thinks that the method is a little rough and defects are also increasingly prominent with technology used to the industry. So we take the method of productive factor classification to measure the industrial structure upgrading from the aspect of factor intensity, which pays more attention to the level of quality, and it also provides a new perspective for the related research. Thirdly, we construct the dynamic panel data and use the method of System GMM Estimation based on the consideration of the inertia and endogenous economic variables. The empirical results are more accurate and reliable. In addition, this paper measures the level of financial development from the aspect of activity and scale, so the conclusions are more comprehensive and objective. |
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