Regional Financial Structure And Regional Economic Development

The theory of the financial development thinks that the important reason for the backward economy in the developing country is the finance suppressed. These countries must deepen the finance in order to improve the economy, and review actually many countries successful cases. The finance deepening is the financial liberalization reform taking market as orientation. Goldsmith thinks, the financial structure is the comprehensive reflection of the financial inactive state, in this sense, the finance deepening is the course of financial structural optimization. So, in the course of our country's regional economic development in particular the economic revival in the backward region, we must pay attention to the function of the financial structureThe financial structure of area means the regional distributing of the state of quantity of financial instruments. It includes the weighing RFIR of the financial development level of area and the structural relation between different kinds of financial instruments. The impact of the regional financial structure on the regional economic development reflects in two aspects. On one hand, it is the function of the increasing to the regional economic total. The motive force of the economic growth is the investment, but the circulation of the fund raises and needs the financial departments. The state of regional financial development can determine the quantity and speed of the regional fund circulating, thus influence the investor choice to the production technology, and then has influenced investors' earning ratio. The investment yield will lead investors to choice the area for investing. The region that has the high level of financial development certainly will attract the more investors to invest, and the economic growth rate will be faster. Meanwhile, the different financial instruments have different advantages while dealing with the transaction cost and information asymmetry problem, this will influence the efficiency of the financial system, and it will also influence the economic growth rate. The development of the regional economy still embodies in the optimization of the industrial structure, and this needs the service of the financial department. With the upgrading of the regional industrial structure, regional economic development needs more high-level financial service, so must make the corresponding adjustment in financial structure along with the industrial structure changes.This article is divided into four parts. First part is the theory summarizes of the regional financial structure, and introduces the research trends both at home and abroad. The second part explains the function of the regional financial structure in the regional economic growth and the mechanism of the regional financial structure function. The third part introduces the function of the regional financial in the regional industrial structure changes under various kinds of conditions. The fourth part contrasts and analyses the function of the regional financial structure in the regional economic development.