Financial Development And Its Relationship With Economic Growth In Chongqing

We have paid attention to the relationship between finance development and economic growth for a long time. But the researches aim at countries in the past, while research object of this paper is some area in a country----Chongqing region. The object change will immit some fresh blood in the research field. Because region in a country is an open system, especially for finance, market is highly integrated, and fund and other factor freely flow. This research has some characters in contrast with the past: we consider national factor' influence on region finance development and economy besides factors inside region. The paper expatiate the outside influence on area finance and economy as an open system after introducing relative research facing independent economy. Then the paper analyzes financial structure in Chongqing. We find national institutions take strong dominance in Chongqing, but local institutions are undeveloped. Finance development level in Chongqing lags national level. Chongqing finance benefits from nation or other area' financial development. After intuitionistic analyzing the paper examine the long-run relationship between financial development and economic growth of Chongqing in multivariate vector auto-regression (VAR) framework. There involve six pairs of factors: Chongqing financial development and nominal output per capita, Chongqing financial development and real output per capita, Chongqing financial development and real output per capita of primary industry, Chongqing financial development and real output per capita of secondary industry, national financial development and Chongqing financial development, national economic development and Chongqing financial development. We find that there are unidirectional causalities from gross output, and secondary industry output, and primary industry output of Chongqing to financial development. We find bidirectional causalities between national financial development and that of Chongqing, and between national economic development and financial development in Chongqing region.