Technological Innovation And Industrial Structure Upgrading: Threshold Effect Of Financial Development

The upgrading of industrial structure is an important part of China's economic development mode transition.In the optimization and upgrading of industrial structure,innovation is of vital importance.There are many factors that affect the process of innovation drives industrial structure upgrade,and the role of financial development is particularly prominent.The existing research mainly focuses on the impact of technological innovation on industrial structure and the impact of financial development on industrial structure,but how the technological innovation drives industrial restructuring and how financial development make effect,the interaction mechanism of these three variables is not clear.Although some studies point out that the backwardness of regional financial market is not conducive to technological innovation and industrial structure upgrading,there is no empirical research on whether the role of technological innovation in industrial structure upgrading will be different under different financial development levels.The upgrading path of industrial structure includes demand driving and supply promotion.From the supply side,the adjustment of industrial structure mainly reflects the speed of technological progress and diffusion effect.Technological innovation originally appeared in one or two industries,and gradually developed into a technological innovation tide and a new growth point under the influence of market competition.Then,the influence extends from a few industries to other industries,and eventually lead to the transformation of industrial structure.This paper argues that demand-driven industrial structure upgrading is also achieved by relying on technological innovation.The increase in per capita income has prompted residents to upgrade their consumption.Consumption upgrades will generate pressure on new products or new processes,which will accelerate the pace of technological innovation,thus promoting the upgrading of industrial structure.If financial development are considered in the above two paths,the impact of technological innovation on the upgrading of industrial structure will show a non-linear effect due to the different levels of financial development.Higher financial levels will encourage residents to increase consumption,thereby strengthening demand and stimulating the effect of upgrading industrial structure from demand side.At the same time,developed financial markets can provide financial support for technological innovation,establish an effective information linkage and feedback mechanism,risk dispersion mechanism,provide management and supervision,and then strengthen the effect of promoting industrial structure upgrading from the supply side.On the contrary,the backward financial market can not provide these effective support for technological innovation driving industrial structure upgrading,and the driving effect of technological innovation on industrial structure upgrading is also not effective.Therefore,this paper argues that the driving effect of technological innovation on industrial structure upgrading is non-linear.Only when the level of regional financial development is raised to a certain level,can the driving effect of technological innovation on industrial structure upgrading be better played.In addition,due to the large number of innovative entities in the eastern region,it is necessary to equip more developed financial systems and more efficient financial markets,and the advanced industrial structure in the eastern region has a stronger endogenous demand for financial development,and the marginal effect of the financial development level in the western region on the technological innovation-driven industrial structure upgrading is greater.Therefore,the author believes that the technological innovation of the eastern region has a greater driving effect on the upgrading of industrial structure than the western region,and the threshold of financial development in the eastern region is higher than that in the west region.Taking the Chinese provincial panel data as a sample,the paper adopts the nonlinear panel threshold model to empirically analyze the driving role of technological innovation on industrial structure upgrading under different financial development levels.After examining the threshold effect of financial development level.After examining the threshold effect of financial development level,the paper compares the financial development level of each province with the threshold value obtained by the test.The research in this paper shows that financial development plays an important role in promoting the upgrading of industrial structure driven by regional technology innovation.Considering the difference of financial development level,the effect of technological innovation on the upgrading of industrial structure is non-linear.Only when the level of regional financial development is raised to a certain level,can the driving effect of technological innovation on the upgrading of industrial structure be better played.The technological innovation in the eastern region has a greater driving effect on the upgrading of industrial structure than in the western region.And the threshold of financial development in the eastern region is higher than that in the west region.Therefore,improving the local financial development system,and improving the efficiency of the financial services real economy are effective ways to promote the process that technological innovation driving industrial structure upgrading.