Abstract: Under thenew development pattern dominated by internal circulation, independent innovation has becomea key force driving industrial structure upgrading. However, in recent years, there is a phenomenon that the acceleration of technological innovation coexists with the deceleration of industrial structure upgrading in many provincial-level regions of China. Based on China’s provincial panel data from 2013 to 2020, using Dagum Gini coefficient and its decomposition method, varying coefficient model, and semiparametric spatial econometric model, we find that low-quality innovation may lead to solidification of regional industrial structure, and this is a reason underlying the industrial structure upgrading bottleneck caused by the high-quality innovation in developed areas. We conclude that the co-existence phenomenon is a result of “Technology Trap” behind rapid increase of technological innovation. The lack of high-quality innovation drive has slowed down the pace of industrial structure upgrading. We explore why industrial structure upgrading lags behind technological innovation from perspective of multiple financing channels. Since slow development of formal finance and serious financial discrimination, we focus on complex effect of diversified financing channels of corporate bonds, shadow banking and digital finance on the quality of technological innovation. It is pointed out that technological innovation will affect the industrial differentiation of industrial structure upgrading along with scale change of diversified financing channels. Empirical results based on panel threshold model show that regions with high scale of corporate bond financing, incomplete shadow banking supervision system and low scale of digital finance are more likely to fall in “Technology Trap”. The above conclusions show that reducing friction of financing high-quality technological innovation and reversing the short-sightedness of financial sector are the important ways to promote the upgrading of industrial structure.

Key words: technological innovation, industrial structure upgrading, diversified financing channels, threshold effect