An Empirical Study Of Financial Development And Economic Growth Productivity

Since Ronald McKinnon and Edward ? S ? Shaw in the 20th century during the 60's to 70's proposal of the financial liberalization policies to promote economic development in less developed countries has been advocated,the relationship between financial development and economic growth has become the focus of widespread attention and a prominent subject of studies.At present,the vast majority of empirical studies basically agree with the development of financial intermediation to facilitate the flow of resources to the elements and to improve the efficiency of resource allocation and,ultimately,to promote productivity growth.However,does China follow this rule?In this paper,based on the inter-province panel data,we use the stochastic frontier production function analysis of China's financial development and productivity of the economics growth.The first part of this paper is about theoretical research and empirical research about the financial growth and economic development at home and abroad.The second part illustrates the interaction mechanisms between financial development and economics development.In the third section,based on China's 2004 to 2006 of the inter-province panel data,we use the Battese＆Coelli(1995) model and corresponding indicators of financial development, respectively,investigating the financial capital accumulation's and capital allocation efficiency's impact on China's productivity efficiency of the economics growth.Part four of this article is the conclusion of the study:In our country,the relative size of the expansion of financial institutions is not conducive to efficiency in production;On the other hand,the four major state-owned commercial banks as the main body of the financial system of credit expansion are not conducive to the improvement of production efficiency.In short,if the financial system can not be carried out fully in accordance with the independent functioning of the market mechanism,then,China's financial development will not have a positive impact on productivity efficiency.The innovation of this article is to use the stochastic frontier analysis model and to construct corresponding indicators of financial development to investigate not only the financial capital accumulation's but capital allocation efficiency's impact on China's productivity efficiency of the economics growth.