Research On Financial Support For County Regional Economic Development In Shandong

To investigate the solution of restraint on regional economy development in Shandong province, the paper involved a load of qualitative and quantitative analysis to dig out the constraining factor on county regional economy, which are mainly showed in following aspects: First, there is a lack of efficient and consummate financial policy systems. Secondly, the situation of capitals draining away from county area is severe. Third, the shrinkage of financial organization in counties is rapid. Fourth, efficient guaranty systems in county area is insufficient. we proposed some strategic conceits of financial support here: first, to establish different levels of political financial system according to different level of economic development in counties of Shandong; secondly, to encourage the financial innovation by exploring the capability of existing financial service; third, to improve the financial and ecological environment of county area to create a good environment for financing county's economic development; fourth, the government playing the full role in guiding the financial market. The conclusions are as follows: First, the economy of Shandong province is deeply restrained by the lagged financial management system. Secondly, the negative relationship between financial loan and economic growth in two selective counties indicates that there exist Financial Constraint to different extent in there two counties. Thirdly, compared with the store market and insurance market in Shandong province, banking system is playing an dominant role in economic development. Fourth, financial capital should research corresponding financial intermediary products actively.In the aspect of qualitative analysis, it has clarified the definition of the CountyEconomics and Financial Supports and displayed well-known theories, such as:regional comparative advantage theory, regional industry structure optimizationtheory, location theory, radiation theory in regional economic development, therelationship theory between regional finance and economic growth and thetheory of government role in economic development etc.. It has also elaboratedsystemically the new rural construction policy which has been performed since17th congress, mainly focusing on balancing urban and rural development andrural financial reform. In the introduction of influential theories in history aboutthe relationship between economics and financial support, this paper hasenumerated a series of related theories, such as Neoclassic Monetary Increasetheory, the well-known American economist Patrick and the valuableGoldsmith's conclusion, and the worldwide spread Ronald I. Mckinon & EdwardShaw model and AK model(Pagano,1993). Consequently, it tries to find out thefactor as well as resolution to fund shortness in regional economic developmentin county area according to the reality in our country. In the quantitative analysis,there is an tentative verification about the increase synchronous trend betweenthe rural economic development and local agricultural loan increasedemonstrated by graphology, followed by using the AK model to researchin-depth the relationship between economic growth and financial development inShandong province, therefore we got the following conclusions: the countyeconomic development in Shandong province lacks corresponding level of financial development, the financial market is still in the initial phase of developing, the credit business of Bank didn't stretch its leg to advance the economic development. As a result, it restricted the further development of economy in Shandong province. The strategy of Financial Deepening should be implemented to solve the Inadequate Financial Liberalization. This paper has also illustrated some successful cases about this issue abroad, aiming to absorb their advantage and policy in financial supporting to economic development.The innovative part of this paper is to analyze the regional economic problems in a new way. It divides the county economic problem into two parts, in representative economic level of both developed counties and underdeveloped counties, to study with statistics respectively. In this paper, foreign trade is regarded as an important factor that influences the economic growth and added into the AK-model as a variable, this kind of analysis reflects the scientific attitude in study of the concrete situation of economic development in Shandong county area.