The Impact Of Financial Structure On Technological Innovation

As China’s economy enters the new normal stage,insisting on promoting economic growth with technological innovation as the main engine has become the main direction of China’s economic development in the future.Technological innovation and technological progress are inseparable from the strong support of the financial system.The importance of optimizing the financial structure to support technological innovation is self-evident.This paper sorted out and summarized the relevant research on financial structure and technological innovation in the existing literature,and analyzed the overall development status and regional differences of China’s financial structure and technological innovation.Based on the relevant theories of financial structure and technological innovation,starting from the differences in financial functions between bank and financial market,this paper systematically analyzed the impact mechanism of financial structure on technological innovation.This paper selected China’s provincial panel data from2005 to 2020,constructed a benchmark regression model and a panel threshold model to empirically test the linear relationship between financial structure and technological innovation,and the nonlinear relationship between financial structure and technological innovation at different stages of economic development.Finally,specific policy recommendations was given based on the actual development of the country and each region.The study finds:(1)From the perspective of the overall national effect,the Market-Based financial structure play a significant role in promoting the level of technological innovation in China.(2)The provinces was divided into three sample groups of developed areas,moderately developed areas and underdeveloped areas on the basis of real GDP per capita.The group regression results show that the Market-Based financial structure is more conducive to technological innovation in developed areas,while the Bank-Based financial structure have a significant positive effect on technological innovation in underdeveloped areas.(3)Further testing through the panel threshold model found that there is a nonlinear relationship between the financial structure and the level of technological innovation based on the stage of regional economic development.When the regional economic development level is low,the Bank-Based financial structure is more conducive to the improvement of the level of regional technological innovation.When the regional economy develops to a certain stage,the Market-Based financial structure have a more significant role in promoting regional technological innovation,and with the further improvement of the regional economic development level,this positive incentive effect tends to strengthen.Based on the above research conclusions,combined with the current situation of China’s development,this paper puts forward relevant policy suggestions:(1)Vigorously develop financial market and expand direct financing channels.(2)Optimizing the banking system,give full play to the main role of banks.(3)Build a financial structure that adapts to local conditions,and dynamically adjust and optimize the financial structure with the improvement of the level of regional economic development.(4)Strengthen government support,increase investment in technological innovation,and promote the balanced development of technological innovation in all regions.