A Study On Financial Development And Dual Economic Structure

As the largest developing country, China has significant dual economic structure, with non-synchronous transformation in different regions, and regional financial development shows a non-equilibrium and multi-level nature. The theories of financial development have done in-depth research on the relation of financial development and economic growth. But the study on financial development and economic structure is not enough, especially the differences between regions. Therefore, the main content of this paper is the study on the different relationships between financial development and dual economic structure.Firstly, on the basis of the former studies, this paper proposes its standpoint. Secondly, from the perspective of region, on one hand, this paper discusses the relationship between financial development and dual economical structure in two ways, including the mechanism of financial development impact on dual economical structure, and two rules of the relationship between them. On the other hand, this paper proposes the mechanism and effects dual economical structure affect financial development. Thirdly, combining data from regions of China, using quantitative analysis method, this paper does the empirical analysis of the regional differences of their relations. Finally, it proposes relevant policy recommendations based on theoretical and empirical results.Through theoretical and empirical analysis, this paper concludes:regional financial development can influence regional dual economic structure through regional capital formation, technological progress, income distribution and industry structure mechanisms. The influence embodies in both horizontal and vertical sides. The former influence shows an inverted "U" shaped relationship in different regions. The latter also shows an inverted "U" shaped relationship in a certain region. At the different stages of regional economic development, financial development firstly weakens, and then strengthens the dual economic structure. Meanwhile, the regional economic structure can affect financial development and bring in dual financial structure.