A Study On The Regional Differences Of Financial Development And International Trade In China

Financial development theory suggests that financial development can promote economic growth by optimizing the allocation of resources in the developing countries. On the other hand, international trade theory has also been shown that the international trade is one of the engines of economic growth. Trade liberalization will effectively promote economic growth by affecting a country's resource allocation. By optimizing the allocation of resources in one economy, free international trade can accelerate its economic growth. Therefore, financial development and international trade are regarded as the two greatest issues of world's economic development for their contribution to economy growth, and their relationship also become a hot topic of economic research. However, the present research lacks comparative study based on regional perspective in a much smaller scale and the regional differences of them have not been revealed and explained although most researchers have focused on the analysis at the national level of financial development and international trade relations. In view of this, the thesis takes the financial development and international trade theory as the instruction, utilizes statistical and metric methods and uses the related research achievements at home and abroad for reference, and fully reveals the regional differences of financial development and international trade in China from"three-dimensional perspectives", namely,"cross-province differences perspective","east, middle and west China differences perspective"and"eight economic regions'differences perspective".On the following is the full content of the thesis: Chapter one is an introduction, which briefly states the background, significance and methodologies, and gives a summary of the relevant researches on financial development and international trade. Chapter two is the theoretical part. First it defines the basic concepts, and reviews the related theory of financial development and international trade. Then it makes the theoretical analysis of their interactional relations, elaborates their mutual influence in detail. On the basis, it focuses on their interactional mechanism. Chapter three studies the regional differences of financial development and international trade in China from"three-dimensional perspectives", that is"cross-province differences perspective","east, middle and west China differences perspective"and"eight economic regions'differences perspective". In addition, it carries on the descriptive analysis by the coefficient of variation and Theil indicators. In chapter four, based on panel data cointegration analysis, combined with the inter-provincial panel data from 1990-2007, from the above-mentioned three perspectives, the thesis uses panel data unit root test, panel cointegration theory, error corrected model and generalized method of moments (GMM) to analyze the relationship of financial development and international trade in the stratification plane and discovers the differences between them. Finally based on the preceding theoretical and empirical analysis, it is given a summary of the whole research. Furthermore, it also proposes targeted policy recommendations on how to promote the relationship between financial development and the coordinated development of foreign trade.