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Research On Financial Efficiency And Economic Growth In China In Terms Of Finance Openness

Posted on:2009-11-27Degree:DoctorType:Dissertation
Country:ChinaCandidate:J H WangFull Text:PDF
GTID:1119360245973498Subject:World economy
Abstract/Summary:PDF Full Text Request
"Learning from history", reviewing the history of the world's economic growth, we found that financial development is crucial for any country in any period of economic growth. However, the importance of financial does not mean that financial should follow the same path and development model at different times in various countries. In the different countries or different periods in various countries, the reason lies that their economic growth conditions (including the level of economic development, system, the market and technical conditions) determine the difference model of economic growth, which also determines the different functions of finance the economy growth requiring, and thus limits space for the financial development. As a service to economic growth, only to the meet the needs of economic growth and more efficiently use its function, finance can promote economic growth, as well as provide the further development of its own. Otherwise, if the role of financial running counter to the functional needs of economic growth, such as the financial constrain or the development of the finance being out of space permitted by the external conditions, finance can not promote economic growth, or even harm economic growth mechanism, eventually lost to the foundation of itself.Since China reforming and opening up, the growth of its financial resources and the nurturing of market allocation mechanisms have made important contributions for the rapid economic growth. However, financial inefficiency and the serious waste of financial resources are increasingly becoming the obstacles of economic and financial sustained, healthy and stable development. And the efficiency of the financial compared to the speed and extensive development is a more deep-rooted problem. In the long run, development of the financial sector ultimately depends on efficiency rather than speed, particularly in an open financial market. Therefore, it is necessary to examine the relationship of financial and economic growth for the economic growth. From the financial efficiency perspective, it may be a better understanding of the interaction between finance and economic growth, and it is better to build a more effective future financial system and promote the future stable economic growth. On the basis of above thinking, financial development - financial efficiency (bank efficiency and capital market efficiency) - economic growth is the logic of this paper. Besides the Introduction, this paper is divided into five chapters:Introduction introduces the research background, significance, the basic definition of study, research ideas as well as structural of this paper on the basis of reviewing briefly the financial and economic theory. Under the guidance of the idea of finance must be adapt to the economic growth, provides an effective financial efficiency concept. The fundamental is to promote economic development and the improvement of economic efficiency, the core idea is appropriate.Chapter one financial efficiency and economic growth literature review. It concludes the summary of the literatures and theories of predecessor on the financial development and economic growth, banks and economic growth, as well as capital markets and economic growth.Chapter two financial efficiency and economic growth theory in the terms of financial openness. This chapter is the theoretical basis of this paper. Based on financial function theory, builds a theory analysis framework of the relations between the banks, the stock market development and economic growth. And, in conjunction with previous studies, compare to the banking and stock market functions from three areas including the promotion of capital formation and improvement of the allocation of resources and encouragement of enterprises innovation.In order to research the relations between financial efficiency and economic growth more clearly, we have introduced the concept of the financial function. From the financial functional perspectives research on the relationship between economic growth and finance is, in fact, to discussion which functions finance should own, which functions to be achieved to promote economic stability and growth. Therefore, firstly, study the concept of the financial function and the construction of financial functions. Secondly, the paper follow the logic of development of the market economy, from economic stability and growth perspective, classify the basic functions of modern finance into four categories, which are to promote economic stability facilitate transactions function, to promote economic growth saving function, to resources allocation function, as well as innovative function.To achieve its financial functions, finance must use some means or media. These media or means constitute a form of the realization of financial functions, referred to as financial formation. Therefore, research on the financial growth effects. It is necessary to study financial formation and the relationship between it and economic growth. Financial formations can be divided into financial institutions (banks) and the financial markets (capital market), that is, direct and indirect financial formations. Bank is the main indirect financial formation and capital market is indirect financial formation. This paper is to study the banking, capital markets and economic growth, and the relationship between financial efficiency and economic growth. Section three of this chapter, from the perspective of the realization of financial functions, and from the effect of promoting capital formation, improving the resources allocation effect as well as encouraging enterprises innovation effect three aspects, compare direct financial (mainly capital markets) and the indirect financial (mainly banks) growth mechanism.Chapter three the empirical study of the relation of bank efficiency and growth under financial openness. On the basis of theoretical analysis in the second chapter, Firstly, measure the 1994-2006 efficiency of Chinese banking sector using the DEA method, including the overall average level of efficiency, as well as four state-owned commercial banks and 10 commercial banks average efficiency (cost efficiency, allocation efficiency, technical efficiency, pure technical efficiency and scale efficiency). It shows that Chinese banking efficiency: 1, in the sample period, the overall technical, pure technical and scale efficiency is higher than cost and allocation efficiency; overall cost and allocation efficiency fluctuate more than technical, pure technical and scale efficiency. 2, Chinese banking cost and allocation efficiency is the upward trend during the samples period, technical efficiency, pure technical efficiency and scale efficiency is relatively stable, and a slight decrease. 3, In addition to pure technical efficiency, the efficiency of commercial share banks in the samples are higher than the state-owned banks. 4, the allocation efficient of the state-owned banks is higher than the cost efficiency. 5, through the analysis of the changes of cost and allocation efficiency, find it is the quality of their loans that affect strongly Chinese banking cost and allocation efficiency. To strengthen risk management on loans is to improve the bank's cost efficiency and allocation efficiency important channels. 6, the anti-risk ability of the commercial share bank is stronger than state-owned banks, and be influenced more slightly by outside than state-owned banks. 7, the state-owned banks do not realize full scale efficiency, and even in some years show a reduced scale.Finally, on the basis of the bank efficiency measurement, the third section using bank efficiency values, Cointegration, multiple VAR analysis and Granger causality test methods empirically study the relations between Chinese bank and economic growth after the reform and opening. The common conclusion is that: 1, the efficiency of Chinese banking industry and economic growth were significantly correlated. 2, the efficiency of state-owned banks efficiency affects economic growth more broadly and importantly than commercial share banks. 3, the scale efficiency of state-owned banks affects economic growth in the marginal decrease. The state-owned banks pure technical efficiency, cost efficiency and allocation efficiency affect economic growth in the marginal increments. 4, Granger causality test and the multiple VAR analysis demonstrate that Chinese banking efficiency and economic growth affect each other. This interactive relationship between state-owned banks efficiency and economic growth is even more conspicuous. 5, even though the effect of commercial share banks on economic growth should be weaker than the role of state-owned banks at this stage, but through the better overall management level than state-owned banks, share banks have an impact on economic growth in the marginal increments.Chapter four empirical study on relation of financial capital market efficiency and economic growth under financial openness. Corresponding to chapter three, on the basis of the theory of the relationship between economic growth and the capital market (stock market) efficiency in the chapter two, empirically study the relation of stock market efficiency and economic growth. Firstly, Use Jeffrey Wurgler (2000) dynamic expansion model to measure of Chinese stock market resource allocation efficiency during 1996-2005. The results show that: 1, the resource allocation efficiency of stock issue market and Chinese stock transactions market is at a relatively low level and volatile. 2, the resource allocation efficiency of stock transaction market is higher than the efficiency of the issue market. 3, the resource allocation efficiency of the stock transaction market fluctuates less than the one of the stock issue market.Finally, we use the efficiency values of the stock market in multivariate regression analysis, VAR analysis and Granger causality test method to empirically study of the relationship of resource allocation efficiency and economic after reform and opening. The common conclusion is: 1, the resources allocation efficiency of Chinese stock market and economic growth are not significantly correlated, whether it is the stock transaction market or the stock issue market. 2, Under the one stage conditions, whether it is the stock transaction market or the stock issue market efficiency and economic growth do not exist the causal relationship, but under the second stage conditions, the effect of economic growth on the efficiency of the stock transaction market and the stock issue market increased greatly in statistics.3, from the results of VAR analysis, we can see our stock market (whether stock transaction market or stock issue market) is not the reason of changes in the economic growth, but economic growth is the reason of changes in the resource allocation efficiency of stock market.Chapter five bank efficiency, under financial openness, capital market efficiency growth effect comparing and policy recommendations. Based on the above research, we compare the relationship difference between bank, stock market and economic growth. Bank efficiency has had a notable impact on economic growth in China, but the capital market efficiency (efficiency of the stock market) does not lie in cointegration relationship with Chinese long-term economic growth, and regression analysis also shows that the impact of the efficiency of the capital market on Chinese economic growth is not significant. 2, bank efficiency affects the economic growth mainly through the improvement of technical efficiency, in the final analysis, through improvements in the scale efficiency to promote economic growth. 3, state-owned banks affect the economic growth on more aspects than commercial share banks, and other important conclusions.Improving financial efficiency is the fundamental way to promote the finance development, Chinese financial reform should focus on the main theme of improving the efficiency of the financial system, ultimately realize the sustainable development of the financial. So at the end of the paper, we provide the recommendations of raising bank efficiency to promote the economic growth, improving the efficiency of the capital market to promote the economic growth, adjusting the financial system structure and realizing the banking system and capital market interaction.
Keywords/Search Tags:financial openness, financial efficiency, bank efficiency, capital market efficiency, economic growth
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