During The Transition Period Of China's Financial Structure Changes And Their Motivation Empirical Research

Generally speaking, finance is one ramification of economic development. It emerges as a result of dividing the work and rapidly grows along with the increased specialization of economic activities. On the other hand, financial development further increases the level of specialization and then stimulates economic growth and development. Therefore, an important part of any macro-economic analysis is to understand the developmental track of financial sector and investigate its underlined economic factors. There are a variety of indicators of financial development. Financial structure, which not only reflects the relative scale between financial superstructure and the entity economy but also measures the allocation of different finance tools among different sectors and finance agency institutions, is commonly regarded as one of the most important indicators.One key characteristic of shunt economy is the dramatic change in a wide range of economic variables. This characteristic also appears in the change of financial structure. More specifically, in China, there are two levels of change in financial structure: (i) the country-level change which is represented by the change in total number of finance tools, structure and the distribution among sectors; (ii) the regional-level change which is characterized by unbalanced regional development in financial tools and collocation fashion. The general purpose of this dissertation is first to investigate changes mentioned above and analyze the economic factors which drive these changes. Then this research will evaluate the performance of changes in financial structure based on the previous analyses and provide suggestions for the decision makers on how to choose effective financial structures. The thesis is organized as follows.Part 1 (2): Started from studying the developmental track of finance theory, we examine the background to the emergence of financial structure, its position in finance theory, its developmental skeleton and its main research fields. We find that the professional filed of financial structure have developed partly as a branch of financial development and a basic assumption for financial structure theory is the non-neutrality of finance. It originated from the public attention on the transition from less developed economy to developed economy after World War Two. To study the financial development issues from the perspective of financial structure is first proposed by Green and Shao, and then extensively developed by Goldsmith. Goldsmith pointed out that the most important channel to study the relationship between financial development and economic growth is to investigate the relationship between the financial structure and economic growth.Part 2 (3, 4, 5): The scale of financial structure and the resulting economic effects. The fundamental task of studying financial structure is to find an indicator system which caneffectively measure the variables of financial structure, which was done by Goldsmith. He suggested to first decompose the issuing of financial tools into three parts: non-finance structure, finance structure and foreign sector, and then make adjustment according to the variation of national income and security price. Meanwhile, Goldsmith pointed out that the indicator system of financial structure can be further decomposed in terms of different situations of research questions and adjusted according to the real data availability in order to deeply examine the mechanism of economic movement and increase the feasibility of calculating the indicators. The main economic effects are reflected in the following two aspects: the relationship between financial structure and economic growth, and the relationship between financial structure and the validity of monetary policy. The analysis shows that the effects of financial structure on economic growth mainly result from the effects of financial tools and the variety development of financial agency institutions on economic growth. At the same time, the validity of monetary policy is different under differ...