Research On The Relationship Between Regional Economic Growth And Regional Financial Development

The concerns about theory of economic growth in the initial stage focused on kinds of growth factors. These factors included capital, labor, land etc. On the basic of New Classical Theory of Economic Growth, Endogenous Growth Theory introduces technology, knowledge, institutional factors and so on in order to explain the causes of economic growth. These new factors included the financial system which is an important economic growth endogenous variable. Since W.Goldsmith in 1969, Ronald I.McKinnon and Edward S.Shaw in 1973, respectively created "Financial Development" and "Financial Deepening", the research on the critical role of the financial system in the allocation of recourse has been in favor of economic scholars.This thesis reflects the theory of financial development at home and abroad, and briefly introduced the classical theory of economic growth and endogenous growth theory, according to classes of Levine in 1997 ,which classify the functions of the financial system into five functions:(1)facilitate risk transactions, evade, decentralization and aggregation;(2) resource allocation(mainly from the information reveals);(3)oversight managers, and promote corporate governance;(4)pool deposit;(5)facilitate the exchange of goods and services, from these aspects to respectively expound approach how financial development promote economic growth.This paper's attention is finding the financial causes of the area economic gap which exist among east, middle and west, as well as the contribution of financial system in the economic growth and check out the relationship between financial development and economic growth. Considering bank is main body of the financial system in China, an Empirical Analysis of Economics mainly consider the total deposit and loan of bank and GDP as an indicators stand for financial development. Of course, financial system also include securities market, insurance market and so on, we collect massive relative data, including each province and the nation. Through in-depth analyzing, we have that financial system in east, middle and west area have indeed promoted economic growth and supplied support, on this basis, aim at the area economic gap between east and middle-west-area, we make several suggestions to promote financial system in order to supply higher quality financial service and much more better support for regional economic development, narrowing area economic gap.We would not put forward the policy recommendations regardless of financial system, so all the advice provided in the paper is based on the condition of middle-west-area province. The main points are as follows: to play a major role in financial policy and strengthen fund direction with the establishment of the regional economic development of the banking structure; broaden our thinking and attention to the central and western areas of capital market development; perfect the insurance market structure, the insurance industry practice of the central and western development by leaps and bounds; vigorously develop short-term financing, the development of regional paper market, improving the financial system environment for building a social credit culture.