Research On The Contribution Of Capital Market Development To Economic Growth In Liaoning Province

To achieve the economic growth goal"revitalization of northeast, Liaoning Province currently in effect", Liaoning as a big economic province requires the strong support from its capital market. Consequently, it has certain theoretical and practical significance to research how the capital market promotes the growth of economy.This assignment briefly states the theory in relevance of capital market and economic growth; analyzes the current position of development of Liaoning capital market and economic growth; and analyzes the mechanisms and path for capital market to promote economic growth as well. It does the quantitative research on mechanisms and path of Liaoning capital market to promote economy development in combination with more than 10 years data of Liaoning capital market development and economic growth. Then the empirical analysis model has been inferred on the basis of Pagano Model. And it uses 1997– 2008's in Liaoning annual regional gross domestic product (GDP), long-term annual data of loans and the annual funding amount of the accumulated stock of capital markets to empirically research the relationship between Liaoning capital markets and economic growth both in long term and short term. Finally, it gives some policy recommendations against the existence of problems and issues.Comparative analysis, chart analysis, empirical analysis and qualitative analysis methods have been used during the process of research. The final conclusions in this assignment are: (1) From the perspective of the funding amount of capital markets, Liaoning province financed 84.636 billion yuan directly from capital markets accumulatively. At the end of year 2008, the balance of medium and long term loans in Liaoning's financial institutions is 619.134 billion yuan. The total amount of these two is 703.77 billion which possess 52.28% of Liaoning's GDP; (2) There is a stable and balanced relationship between Liaoning capital markets development and economic growth in long term. In the long run, the contribution of capital market to economy increases comes from medium and long term loans. That is, if the balance of medium and long term loans increases 1%, the GDP in Liaoning province rises by 5.225%. By contrast, the stock market still not fully contributes to the growth of economy. In long term, the funding amount of stock increases 1%, the GDP will only increase by 0.97%. The roll of share market is very weak. In short term, the balance of medium and long term loans, and the development of stock market have few influences on the growth of economy, etc.