Financial development plays a promotive role in improving capital allocation\neffect of industrial sectors, promoting new industrial technologies and\nchoosing leading industries. Studying the relationship between financial development\nand structural upgrading of the manufacturing industry in the\ntransition period of â??high-quality development of manufacturing industry in\nChinaâ? is meaningful and important. To achieve high-quality development,\nwe must simultaneously improve the efficiency of capital allocation and\ntechnological innovation, both of which need the support and the promotion\nof financial development. This paper systematically analyzes the impact mechanism\nof financial development on the upgrading of manufacturing industry\nstructure. Based on the panel data of 121 cities with active industries in\nChina from 2006 to 2018, the impact of financial development on the upgrading\nof manufacturing industry structure is studied from three aspects: financial\nscale, financial efficiency and financial agglomeration degree. The\nempirical results show that there is a positive correlation between financial\nefficiency and structural upgrading of manufacturing industry, and a negative\ncorrelation between financial scale or financial agglomeration and structural\nupgrading. Further analysis shows that financial development has an effect on\nmanufacturing industry structural upgrading effectively. However, this effect\nis mainly driven by the development of â??qualityâ? of the financial industry,\nwhile the development of â??quantityâ? plays a reverse inhibitory role.
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