Financial Development,Fixed Capital Formation And Economic Growth

Part 9 of the 14 th Five-Year Plan,"Optimizing Regional Economic Layout and Promoting Coordinated Regional Development",mentions that "in-depth promotion of the comprehensive revitalization of the Northeast,support the accelerated development of special types of regions,and promote relative balance in development","promote the reconstruction of the competitive advantages of the manufacturing industry in the old industrial base,and build a demonstration zone for industrial transformation and upgrading".It can be seen that the revitalization of the old industrial base is still one of the important areas of China’s economic development in the next five years.However,in recent years,a prominent problem is that the financial development of the old industrial base is not synchronized with the economic growth trend,and even the economic growth rate slows down or even negative growth when the financial development is strong.In view of this phenomenon,this paper selects old industrial cities as research samples to analyze the mechanism of their financial development affecting economic growth,which not only expands the research around developed countries and economically developed regions in the past,thereby enriching the traditional financial development theory,but also helps to clarify the effect of old industrial cities in using financial development to promote economic growth,so as to further clarify the toolbox of old industrial cities to promote economic growth in the future,and its practical significance is self-evident.Looking at the whole text,the specific research ideas are as follows: first,study the mechanism of financial development to promote economic growth,starting from the three mainstream financial development theories of neoclassical theory,endogenous growth theory and Schumpeter’s innovation theory,analyze the basic views of financial development affecting economic growth,sort out the two working mechanisms of financial development-capital formation-economic growth and financial development-financial innovation-economic growth,combined with the current situation of investment-driven economic growth in old industrial cities.The mechanism of financial development-fixed capital formation-economic growth,which is more in line with the development path of old industrial cities,is selected for research.Second,the old industrial cities are divided into four regions: northeast,east,central and western,and statistical methods are used to establish charts to describe the basic facts of financial development,fixed capital formation and economic growth of old industrial cities.Third,in the empirical analysis part,94 old industrial cities in China are selected as samples,financial development,fixed capital formation and economic growth are taken as the core explanatory variables,government expenditure,foreign investment and urbanization rate are taken as the control variables,and the dynamic panel data model is used to conduct two-stage regression analysis of financial development,fixed capital formation,fixed capital formation,and economic growth,and then the mediation effect analysis is carried out.Finally,the conclusions are summarized based on the previous regression results,and suggestions are made accordingly.This paper finds that in the two-stage regression,the impact of financial development on fixed capital formation and the impact of fixed capital formation on economic growth are lagging and timely,and the impact of fixed capital formation on the economic growth of old industrial cities in different regions is affected by the degree of financial development of the region itself,while the intermediary effect of fixed capital formation under the financial development-economic growth mechanism is significant,but due to the existence of other factors,this impact is limited.Therefore,in order to better promote the transformation and upgrading of old industrial cities,in addition to accelerating the formation of fixed capital,it is also necessary to pay attention to the development of human capital,strengthen innovation and other factors that promote economic growth.