Study On The Relationship Between Financial Development And Economic Growth Of Zhejiang Province

The economic growth is the prerequisite of social development and political stability, therefore, it is the hot point in the economic circles to continue to explore, discover and optimize the elements of economic growth and make them play their positive role in promoting economic growth. As financial development has played more and more vital role in the economic life, a lot of scholars have conducted the study on the relationship between the financial development and economic growth. The studies generally hold the view that there was a associative relationship between the financial development and the economic growth, the insufficiency and excess of financial development both have the negative impact on the economic development. In recent years, many scholars abroad found that a sound financial system can promote the economic growth and economic growth in turn affects financial development, between them there is a mutual promotion mechanism. Compare with the research abroad, the domestic related research conclusion is not unified, and this is mainly concerns with the current financial development condition of China.Since the Chinese Economic Reform, Zhejiang economic develop fast, it has become one of the most active areas entire Chinese economy. In Zhejiang economic development process, Zhejiang finance overall situation has showed a good development momentum. Based on the theory of the financial development and the qualitative analysis on the Zhejiang financial development, using the unit root test, cointegration test and Granger causality test, this paper has carried on the empirical analysis on the relationship between Zhejiang financial development and the economic growth. And based on the actual development situation of Zhejiang economy and finance, the paper has made some proposals and the measures. The paper discovered that there was a long-term cointegration relationship between the financial development and the economic growth of Zhejiang, and the economic growth has made a significant impact on the regional financial development in Zhejiang. However, the financial development is lack of explanatory power to the economic growth. It has not established a mutual promotion mechanism between the financial development and the economic growth.The main content of this paper are as follows:The first part mainly introduced the research background, the significance and the method as well as the technical route and so on. The second part is literature review on the theory of the financial development, including the relevant theoretic and empirical study at home and abroad. The third part is the status of financial development of Zhejiang, mainly including the overall state of financial development, the development of private financial in Zhejiang and problems in their development. The fourth part is the empirical analysis, through the unit root test, cointegration test and Granger causality test, the paper made the empirical analysis on the relationship between financial development and economic growth of Zhejiang and made conclusions. The fifth part is based on the actual situation of financial development and economic growth in Zhejiang, the paper made some recommendations and measures.