Financial Structure,Technology,and Economic Growth:A Structural Matching Perspective

Different types of capital are better suited to financing technologies with different risk profiles,and structural matching between finance and technology may critically influence economic growth.Using cross-province panel data from China,we estimated the impact of the matching relationship between regions'financial structure and technology level on economic growth.We show that:(ⅰ)the matching relationship had a statistically significant positive impact on economic growth;(ⅱ)structural mismatching reduced economic growth in comparison with the optimal matching point;(ⅲ)structural matching better facilitated economic growth in more developed regions;and(ⅳ)capital accumulation and technological progress were two of the main channels through which matching influenced economic growth.We address potential endogeneity concerns and perform robustness checks,and our results remain valid.Our findings provide convincing evidence for the optimalfinancial structure theory and explain China's rapid growth despite its comparatively underdeveloped securities market.

The Effects of Financial Structure on Urban-Rural Income Gap Viewed through Economic Growth and Urbanization

From the perspective of economic growth and urbanization,this paper proposes several hypotheses on how financial structure affects urban-rural income gap combining with the stylized facts of Chinese economy,and then uses a panel data of 29 provinces over 1996-2015 to conduct empirical analysis.Theoretical analysis shows that owing to the distinct availability of urban and rural residents for financial services,financial structure has a distinct impact on their income disparity.Meanwhile,through the function of credit allocation,financial structure plays important roles in the processes of economic growth and urbanization,and then has indirect effects.The results indicate that increasing the ratio of direct financing has a direct impact on shrinking the urban-rural income gap,and has an indirect impact through economic growth and urbanization.More importantly,the intermediary effect of urbanization is stronger than that of economic growth.Therefore,releasing the controls on financial markets helps shrink the urban-rural income gap in China.

Structural Restriction in the Development of Chinas Financial Industry

After China's accession to the WTO, the main problem China now faces in its financialdevelopment is how to enhance international competitiveness while safeguarding financialsecurity. Since reform and opening up, the development of Chinas financial industry hasfeatured extensive quantitative expansion, but without sufficient consideration given toincreased risk. This has led to serious defects in the financial structure, which has hamperedthe financial industry from further development and from improving its internationalcompetitiveness. All these have had unfavorable impacts on financial stability and security.Therefore, in developing Chinas financial industry, the stubborn pursuit of growth inquantity is inadvisable. What is needed is to change this way of thinking and to promotereform and development of the financial industry with emphasis on structure improvement,and to seek a way of development that can raise international competitiveness, while at thesame time ensuring financial security.