A Quantile Regression Analysis on the Relations between Financial Development and Industrial Structure in China

Abstract

The purpose of this paper is to analyze the correlation between financial development and Industrial structure. Quantile regression method and panel data model are applied to empirically study the impacts of financial development scale and financial development efficiency to industrial structure during the period from 2005 to2009 in 31 administrative regions in China. The results show that financial development efficiency has positive effects to secondary industry growth at various kinds of conditional distribution, but financial development efficiency has positive effects to tertiary industry growth only at the central and top of conditional distribution, while the effects is negative at the bottom of conditional distribution. Empirical results also indicate that the significant differences of the impacts of financial development scale to secondary industry growth and tertiary industry growth. Financial development scale plays significant positive effects for the tertiary industry growth at various kinds of conditional distribution, while the role of financial development scale to the secondary industry growth is negative. The results imply that financial development scale is conducive to China's industrial upgrading, while financial development efficiency is not conducive to China's industrial upgrading.