The Research On The Impacts Of Financial Development On The Quality Of Export Products Of China’s Manufacturing Industry

In recent years,the scale of China’s foreign trade has been expanding.Trade has played an increasingly indispensable role as an important support for promoting China’s national economic and social development.Meanwhile,as the export China’s products has grown rapidly,the phenomenon of “more but not strong” exports of our products is also existed.The structure of China’s foreign trade needs to be transformed and upgraded,which requires the promotion of the quality of export products.In addition to domestic and foreign economic factors which affect the quality of a country’s export products,domestic financial environment is also indispensable.The National Financial Work Conference in July 2017 also clearly pointed out that the development of financial markets should serve the real economy,of which the core is the financial support for the upgrading of China’s export quality.Based on this,this thesis studies the impact of financial development on the quality of China’s manufacturing export products from both theoretical and empirical aspects,which can provide reference for enhancing the competitiveness of China’s export products and realizing the improvement of China’s export quality.Based on the reverse selection mechanism under information asymmetry and corporate financing constraints problem,this research theoretically discusses the transmission mechanism of financial development affecting export product quality.Then,using the panel data of 30 provinces and cities in China from 2003 to 2016,with comprehensive consideration of financial institutions including banks,securities,insurance,etc.,this study uses the principal component analysis method to construct the financial development index,and measure the financial development level of each region.At the same time,this research uses the nested Logit model from the product level,taking into account the demand side information,to measure the quality of export products of China’s manufacturing.Then this research establishes econometric model to examine the direct and indirect impact mechanisms of financial development on export quality from the national level and the regional level of the eastern,central and western regions.The results show that financial development can promote the improvement of China’s manufacturing export quality generally,and also indirectly through the three channels of FDI technology spillover,R&D capital investment and human capital accumulation.The impact through R&D investment and human capital accumulation channels are more significant,and the spillover effect of financial development on FDI is limited by the absorption of foreign technology by local companies and the crowding out effect of domestic financial expansion on foreign investment,making its indirect impact on the improvement of product quality insignificant.The further research has found that financial development is more likely to have an impact on product quality through R&D investment and human capital for high quality exporting products.The results of this thesis also show that there are regional differences between the direct and indirect effects of financial development on the improvement of export quality.Compared with the western region,the financial development of the eastern and central regions has a more direct effect on the quality of export products,and the eastern region tends to make influence through technological spillovers and R&D.However,the financial development affects the quality of export product through the channel of human capital accumulation in the central and western regions.This research provides four suggestions based the conclusions: Firstly,to promote the optimization of talented person structure and play a role of financial supporting;Secondly,to relieve the R&D investment financing constraints and promote the development of knowledge intensive industries;Thirdly,to improve the financial intermediary types and financial service systems to achieve rational allocation of financial resources;Fourthly,to implement regionalized financial development strategy to guide the quality upgrade of regional export products.