An Empirical Study On Relationship Between Financial Development And Economic Growth In Anhui Province

Since the reform and opening-up, the economy and finance of Anhui province have made a great progress, but there is huge disparity compared with the Yangtze River Delta. It is a great task to make the economy of Anhui actualize leapfrog development in the background of Central Rise and concept of Pan-Yangtze River Delta. At all events, the economic development cannot be separated from the support of finance. Comrade Deng xiaoping said that finance was the core of economy and handling financial affairs well was the key to success in the sphere. But What role does the finance play in the economic development of Anhui? This paper discusses the relationship between financial development and economic growth from Anhui's concrete conditions and comparision with the Yangtze River Delta in the background of cooperation of economy and finance in the Pan-Yangtze River Delta. It reveals the contributions of financial development to the economic growth and puts forward corresponding policy proposals of financial development in Anhui province.The financial development has promoted economic growth of Anhui in some extent since the reform and opening-up. The empirical study indicates that expansion of financial scale and development of securities market have promoted the economic growth of Anhui in varying degrees. The contribution of securities market's development to economic growth exceeds the contribution of financial scale's expansion to economic growth until the seventh period, but it is growing. It shows that the contribution of financial scale's expansion to economic growth is still bigger than securities market's development to economic growth, but securities market's development with less than twenty years is having huge potential. The efficiency of financial development contributes little to the economic growth and sometimes the contribution is negative. There is no pronounced evidence that shows the development of insurance market contributes to the economic growth.The financial development varies in different provinces of Yangtze River Delta. The financial development of Jiangsu is mainly represented as the expansion of financial intermediaries'assets. The financial development of Zhejiang is mainly represented as the development of securities market. And the fiancial development of Shanghai is mainly represented as both the expansion of financial intermediaries'assets and the development of securities market. Because the contribution of securities market's development to economic growth is huge, Anhui should learn from the experience of Zhejiang. It shall let the financing from securities markets be put the higher priority than the financing from financial intermediaries to make the financial development promote economic growth better.Based on the result of empirical analysis, to make the financial development promote the economic growth more quickly and comprehensively, Anhui should vigorously develop diversified financial system to improve efficiency of financial development, continuously increase financing from the securities market, accelerate the reform of insurance institutions and enhance the operation level of insurance industry, strengthen the cooperation of economy and finance with the Yangtze River Delta.