The Impact Of Financial Development On The Export Of Manufacturing Industry

Since 1990s,the level of financial development of all countries has been greatly improved.At the same time,the scale of trade between countries has been expanding.The international competitiveness of goods transferred to the technical content,systems and so on.These "soft elements" play a role in international trade by influencing the country's comparative advantage,and have a significant impact on the export commodity structure of a country.In countries with developed financial systems,high-tech capital-intensive goods account for a larger share of trade volume.It can be seen that there is an internal relationship between the level of financial development among countries and their trade structure.With the opening and development of China's economy,the level of financial development has improved and the structure of export commodities has been improved.However,there are some problems in the financial system,which hinders the coordinated development of finance and trade.In the current critical period of trade transformation and development,we should give full play to the role of the financial system in trade.So,what is the relationship between financial development and international trade?This paper starts with the difference of external financing dependency between different industries,and studies the different impact of financial development on manufacturing export from the theoretical and empirical aspects.First of all,based on the theories of financial development and international trade,this paper summarizes the research on the relationship between financial development and export trade.Based on the endogenous growth theory and the new trade theory,the paper analyzes the mechanism of financial development on export.High-quality financial systems can improve the economy's savings rate,savings-investment conversion rate and marginal productivity of capital,increase the country's capital endowment,as much as possible to meet the external financing needs of enterprises,thereby alleviating the negative effects of financing constraints on export growth.The improvement of the level of financial development can reduce the financing cost of the enterprise,which is conducive to the formation of economies of scale and the comparative advantage of the industry.The industries with large financing dependence benefit more from the developed financial system.The development of financial market can reduce the adverse selection and moral hazard caused by incomplete information,relieve external financing constraints,accelerate the development of the industry,and promote the formation of comparative advantage.Secondly,this paper analyzes the impact of financial development on the export of manufacturing industry by taking 27 ISIC manufacturing sub-sectors in 70 countries as the explanatory variables,the financial development level and industry financing dependency cross-terms as the core explanatory variables.The study based on the overall sample found that the improvement of financial development can promote the expansion of manufacturing trade.Based on the study of grouping samples,it is found that there are differences in the direction and significance of different grouping estimation parameters,which shows that the influence of financial development on the export of manufacturing industry is different.The size,orientation and significance of the estimated parameters in the 27 sectors are found to be different based on the study of the sub-sectors,further demonstrating the difference in the positive overall impact.The robustness test of adding the lagged term as the explanatory variables gives the results similar to the sample regression of the subdivision industry.Two conclusions are obtained by empirical analysis.On the one hand,the level of financial development can promote the export of manufacturing.On the other hand,the impact of financial development on exports is different among different manufacturing industries.The size and direction of the impact are mainly affected by external financing dependence.In the end,this paper summarizes the research conclusions and puts forward the policy implications for China's financial development and trade transformation.China should attach importance to the coordinated development of finance and trade,speed up financial reform,improve the quality of financial development,improve the legal construction of finance,broaden the financing channels and give full play to the advantages of FDI.At the same time,we should combine the characteristics of the industry,rationally allocate financial resources,improve the efficiency of capital use,promote the formation of comparative advantages of trade,change the mode of trade development.