County Financal Capital Loss And Economic Growth Of County In Western China

Since the reform and opening up in 1978,China's economy began to develop at a high speed,and has made remarkable achievements.However,as the county economy linking urban and rural development has been flagging,the loss of county financial funds is one of the important factors that can not be ignored.The huge loss of county financial funds not only limits the development of county economy,but also enlarges the gap between urban and rural areas.This means that the dual economic structure has been strengthened.All these have restricted the long-term and steady growth of China's economy.Therefore,whether the starting point is to solve the current prominent dual economic structure problem in our country,or to achieve sustainable economic development and building a well-off society in an all-round way,we need to pay attention to the deepening and reform of county finance.The paper analyzes the influence mechanism of County Finance on county economic growth in light of China's national conditions.This paper also includes the historical data of county finance and rural finance in Shaanxi province collected by field research,and makes empirical tests on relevant research hypotheses.The findings of this study are as follows.First,this paper theoretically reveals the direct and indirect influence mechanism of county financial loss on County Economic growth.The direct influence mechanism mainly reduces the county economy construction fund supply,thus suppresses the economic growth.For the indirect influence mechanism,this paper analyzes the influence mechanism of county financial capital loss on county economic growth from three aspects of capital,labor and technological progress from the new classical economic production function.The results show that there is a worsening "Matthew effect" between the loss of county financial funds and the industrial structure,urban-rural income gap and technological progress.This makes the county capital and labor continue to loss,and lead to technological innovation lag,and eventually lead to a backward county economy.Through interviews and research methods,this paper obtained the data of the capitalflows of financial institutions in 79 counties or county-level cities in Shaanxi province.And for the first time,this data is used to evaluate and analyze the loss of regional county financial funds comprehensively.The result shows that the loss of county financial funds in Shaanxi province is very serious,which mainly stems from the siphon effect of large state-owned banks on county funds,but it is relatively stable and has no deterioration trend.In addition,this paper also uses panel model and canonical correlation analysis to study the direct impact of county financial loss on County Economic growth.Then,the paper collects the financial loss data of the financial institutions in 79 counties of Shaanxi province from 2011 to 2015.According to the threshold panel model and quantile regression model,this paper demonstrates the three indirect effects of county financial loss on County Economic growth.The three indirect variables are regional industrial structure,urban-rural income gap and regional total factor productivity.The study found that the county financial loss has deteriorated "Matthew effect" both on regional industrialization and rural-urban income gap,but this has promoted the improvement of regional total factor productivity.This is due to the loss of county financial funds conform to market rules,but this does not mean that the government can ignore the county financial capital loss.With the marginal decrease of capital return and the decrease of scale effect,the continuous expansion of county financial capital loss will eventually curb regional total factor productivity,which is based on quantile regression results.Finally,according to the previous theoretical analysis and empirical test,the basic research conclusion of the paper is obtained.The paper provides policy suggestions and support for the economic development of the county economy and the development of the county economy from three aspects-to expand the scope of service of the county financial institutions,to construct a diversified county financial structure and to clarify the government functions.The innovations of the paper are as follows.First,the paper constructs the theoretical framework of the impact of county financial loss on County Economic growth.Most of the previous studies focused on the correlation between county financial development and county economic growth,and ignored that large-scale development of county finance could lead to a large number of county financial losses.This weakens the optimize configuration ability which county finance has on county funds,and has a negative impact on County Economic growth.Based on the neoclassical economics,the paper introduces the loss of county financial funds into the county economic growth.And analyzes the influence of the loss of county financial resources on the economic growth of the county from the aspects of capital,labor force and technological progress in theory and empirical ways,which provides a new perspective frame for the study of county financial problems and county economic growth.Secondly,the paper puts forward the mechanism of the interaction between county financial capital loss and county economic growth factor.Capital,labor and technological progress are three elements of economic growth.County financial capital loss formed the interaction "Matthew effect" with backward industrial structure,widening urban-rural income gap and low overall factor productivity through these three element,and thus form a vicious circle.This provides a new perspective for explaining the relationship between county financial capital loss and county economic growth.Thirdly,the paper calculates the loss of county financial funds by using the flow data of county financial institutions,and analyzes its impact on county economy.Due to the lack of relevant data on the flow of funds,the previous study on the loss of financial funds in the county has focused on the qualitative research of concept definition and countermeasure analysis,and few studies have carried out in-depth and detailed empirical tests.The author spent several months,a lot of manpower,material and financial resourcesto interview and investigate more than 11 types of financial institutions in various counties of Shaanxi province.Eventually,the author obtained the data from 79 counties in Shaanxi province from 2011 to 2015.As a forerunner,the author gives an empirical evidence on how the county financial capital loss affects the county economy.