The Studies On The Financial Liberalization Changes In China

China has been engaged in its market-oriented reform for financial system since 1978. As unique one of the emerging market economies, it is different for its characteristics from other emerging market economies such as Latin America and East Asia that China's financial liberalization has promoted its financial development and gradually built up the market-oriented financial system with Chinese characteristics, while China's economy has not encountered the volatility and crisis from its financial liberalization.Based on the theoretical view of institutional economics, the research on the financial liberalization changes in China has been carried out as follows, by means of empirical techniques from econometrics:Firstly, with the data set of China's financial liberalization during 1978-2005, it has been built up for financial liberalization index of China which includes its four scopes such as financial intermediary liberalization, financial market liberalization, government reform and financial openness. Furthermore, this paper is engaged in the empirical test for the relationship among the four scopes and its nexus to the growth respectively with the cointegration test and Granger approaches. The results show that the index could accurately imitate the financial liberalization changes during China's economic transaction, and dual direction result of Granger's causality exists among the four scopes except the pairs both the financial intermediaries-growth and .government reform-growth respectively, which could suggest that it is not that the financial liberalization promote the growth, but that the growth affect the financial intermediary liberalization and government reform in the short-run.Secondly, based on the provincial data set of financial liberalization during 1990-2006, this paper has set up the regional financial liberalization index of China, which shows the results about regional changes and disparities of financial liberalization as these:(1)The institutional changes from financial reform clearly promote regional financial liberalization, so the market-oriented reform for financial system is basically effective, and all provinces take a gradual path on their financial liberalization changes.(2)It always shows disparities for regional financial liberalization changes, which means the affects of financial liberalization should be unbalanced among the provinces.Compared with the relative level of regional financial liberalization, the east is much higher than the middle and west respectively.With financial liberalization going on, the relative level of western provinces grows higher than the middle's.Thirdly,based on the panel data set of regional financial development and investment, the empirical survey has been carried on with Ndikumana model,so as to explore the nexus between financial liberalization,financial development and investment respectively.The results show as these: The first,financial liberalization affects the investment significantly and shows the differences between the four aspects..The second,China's path of financial liberalization is not the copy of foreign emerging economies that take the pure liberalization as their paths.The third, the affect of financial structure on investment shows the differences that the affect of financial intermediary is larger than financial market.Fourthly, with the Q-model and Euler model respectively, the GMM techniques has been adopted to have a survey on the constraints reducing by the financial liberalization changes, which is based on provincial listing firm-level data. The results have been presented as follows: At first, Q-model and Euler model can properly explain not only the affects of financial liberalization on financial constraints, but the regional differences as well.At second, China's financial liberalization changes and its four relative aspects have the significant affects to mitigate the financial constraints, so as to encourage firms to invest.At third, the mitigating of financial constraints shows the regional unbalanced affects clearly that the east is stronger than the middle and west respectively; In the middle,the affects of financial intermediary and government reform are unsignificant respectively, although the middle's financial liberalization could reduce the constraints significantly; In the west, apart from the financial openness, the financial liberalization changes and its relative aspects such as the financial intermediaries,government reform and financial market have not significant affects on constraints reducing.Finally, there is the conclusion and suggestion on policy making for promoting financial development, by means of further reform of financial system to mitigate the institutional constraints.Meanwhile, there has a prospect view for future research.What about the innovationary issues of this paper are as follows:â‘ Introducing the concept of relative level to establish the financial liberalization index between 1978 and 2005, and having an empirical test of Granger's causality between financial structure, government, financial openness and economic growth respectively. â‘¡Innovationally setting up the regional index of financial liberalization during 1990-2006, which shows the relative level of institutional changes of all provinces and the disparities.â‘¢As the first usage of index, this paper introduces it into Ndikumana model as a kind of institutional variables, based on the panel data set of provincial financial development and investment during 1995-2004, so as to test the nexus between financial liberalization, financial development and investment respectively. The second usage of the index with exploring issues is the testing of relationship between financial liberalization and financial constraints with provincial firm-level data. With accounting data from provincial 637 listing firms about financial constraints, this paper adopts Q-model and Euler model respectitvely to test the mitigating of financial constraints when introducing the index as the institutional variables by means of GMM approach, which can explain the nexus between financial liberalization and financial constraints, and the regional disparities...