An Analysis Of Bank Credit On Local Economic Growth In China

The financial industry has the reputation for the core of modern economy,so studies on the effect of local economic development on credit growth have the vital practical significance。By the empirical research on Shenzhen 1979--2007 time series data,we will get the concrete influence analysis of local economic development on bank credit growth.This article uses cointegration test,error correction mechanism and vector auto regression and impulse response chart to test the long-term association and causal relation between Shenzhen bank credit and the local economy growth,and deeply depict the dynamic effect of the local economy on bank credit,the main conclusion is:(1) Bank credit and local economy growth have causal and promoted mutually relationship, which have the common long-term trend.(2) Bank credit which promotes the local economy growth has the obvious hysteresis quality.The influence of short-term undulation will continue multi-times,also may be able to adjust to the long-term trend.(3) The rate of bank credit increment is not remarkable to influence the rate of local economic growth,but the rate of the local economic growth is remarkable and positive to influence the rate of bank credit.(4) Short-term credit and local economy does not have long-term cointegration; Medium-and-long-term credit and local economy have causal and promoted mutually relationship;Both the rate of short-term credit and medium-and-long-term credit increment is remarkable and negative to the influence on the rate of local economic growth.