With the development of China's economy in "new normal", the construction of smart cities, supported by technical innovation, is enjoying an upgrading boom. And local financial development plays a critical role in technical innovation and the construction of smart cities. By using panel data of 30 provinces from 2000 to 2013 and introducing the interaction item of financial development and technical innovation, this paper uses FE and two-step system GMM models to examine the advancement role of financial development in the construction of smart cities by promoting technical innovation. The FE regression results show that the combination of financial development efficiency and technical innovation is the most obvious factor in promoting the informatization development of smart cities. On average, the increase in financial development efficiency by 1% leads to the rise in information level by 0.029%. But the combination of the expansion of financial development scale, the optimization of financial development structure and technical innovation plays a relatively weak role in promoting informatization development. The interaction coefficients in system GMM regression results decrease somewhat, but still have significantly positive correlation. Therefore, the development of financial system can promote the intermediary effect of technical innovation, thus bolstering the informatization development of smart cities.
Financial Development, Technical Innovation and the Construction of Smart Cities: An Informatization Development Perspective
Journal of Finance and Economics Vol. 42, Issue 02, pp. 4 - 15 (2016) DOI:10.16538/j.cnki.jfe.2016.02.001
Cite this article
Zhan Yong, Li Shan. Financial Development, Technical Innovation and the Construction of Smart Cities: An Informatization Development Perspective[J]. Journal of Finance and Economics, 2016, 42(2): 4–15.