Font Size: a A A

Analyse On The Mechanise Between Financial Development And Economic Growth Of China

Posted on:2004-09-10Degree:DoctorType:Dissertation
Country:ChinaCandidate:M S RanFull Text:PDF
GTID:1116360095956620Subject:Technical Economics and Management
Abstract/Summary:PDF Full Text Request
Since one century or so, a noticing economic development pattern can be generalized as that economic growth always goes with a certain extent financial development. The mutual stimulated relationship between financial development and economic growth seems more obvious in the economic of the west developed countries. Looked closely into the economic growth in China, how to find the reasonable relationship between financial development and economic growth from the history? How to assimilate the scientific nutrition in the theories of the foreign financial development to get the theoretical instruments? This paper studies the relationship between financial development and economic growth in China comprehensively from the views of theories and practice, aimed at get the segmental answer.Part 1 of this paper reviews and comments the international existent theories of financial development. It divides the whole forming and developing process of the theories of financial development which background is free market-economic into two phases, and considers that the hypotheses of the models and the opinion of policies are comparatively close to the realities by introducing the factors that inconsistent with the perfect competition market, such as uncertainty, information asymmetry, imperfect competition, the rank of quality and externality in the theories of financial development after 1990, although these theories are deficient because they emphasize excessively the advantage of the financial system without considering the negative effect that the financial turbulence and crisis bring to the economic development. So these theories have the value of reference to financial theoretical research and financial development practice in the developing country.Part 2 analyzes the function mechanism between financial development and economic growth theoretically, revealing the transmission channel between them, aimed at establishing the basis of stimulating the mutual sound relationship between them by the suitable microeconomic policies are carried out.Part 3 applies the theories of financial development in the financial development in China. Empirical analyses are made fully and accurately to testify whether a certain extent correlation exists between financial development and economic growth or between stock market development and economic growth in China.First, according to the frame of the Johansen's VAR theory, it is divided into two parts: 1952--1978 and 1979--2000 by 1952--2000 to analyze the casualty relationship between financial development and economic growth, and the conclusions can be made: â‘ financial development didn't stimulate the growth of GDP and the output of the secondary industry, vice versa; however the mutual casualty relationship exists between financial development and growth of the output of the third industry in 1952--1978, â‘¡first, a mutual casualty relationship exists between financial development and economic growth which shows that economic growth promotes financial development, vice versa; second, the one-way casualty relationship lies between the growth of the output of the first industry and financial development which indicates that financial development accelerated the growth of the output of the first industry while the growth of the output of the first industry didn't promote the financial development; third, the one-way casualty relationship exists between the growth of the output of the second industry and financial development which shows that financial development urged the growth of the output of the second industry, but the growth of the output of the second industry didn't lead financial development; fourth, the one-way casualty relationship presents between the output growth of the third industry and financial development which suggests that the output growth of the third industry leaded the financial development whereas financial development didn't stimulate the output growth of the third industry. So the conclusions can be made from the two part empirical an...
Keywords/Search Tags:Financial development, Stock market, Economic growth, VAR, Casualty relationship
PDF Full Text Request
Related items