An Empirical Analysis Of The Impact Of Financial Structure On Economic Growth In Yunnan Province

Finance is an important factor which keeps the whole system stably. Different financial structure constitutes the different system, and determines the different functions, and whether the function can be effective. Therefore, different financial structure of the financial system will have different impact on the development of economy. In order to promote the construction of border financial comprehensive reform pilot area, the central and provincial governments issued "The Border Areas in Yunnan Province Construction Financial Comprehensive Reform Pilot Area Overall Plan", "Comprehensive Reform Pilot Area of Construction Border Financial Implementation Opinion" respectively, which fully embodies the value of central and provincial government for financial. Therefore, based on the reality of Yunnan province, this paper studies how the financial structure affected the economic growth. Then, its aim is to put forward relevant financial policy and keep the development of economy steadily and rapidly.Firstly, this paper summerizes the international and domestic research on the effects of financial structure on economic growth, then finds out the imperfection of indicator selection; Secondly, it analyzes the effect of financial structure towards economic growth. Using the statistical analysis to analyze the current situation of economic growth and structure of Yunnan province; thirdly, based on the past scholars’studies, this paper selects 10 indicators and uses Principal Component Analysis to reduce dimension and get three financial factors. Then, we can build the VEC, VAR model with the rate of increase of GDP, and analyze their long-term equilibrium relationship and causality, short-term dynamic effect and the contribution of each factor to economic growth; Finally, according to the current situation and the empirical analysis, this paper tries to put forward policies and suggestions.The main conclusions of this paper are as follows:1. Total financial structure is the Granger cause of economic growth. The contribution of total financial structure to economic growth has the time-lag effect. The relationship is reversed between the structure and economic growth. The essence of total financial structure in this thesis is financial deepening. All of these suggested that the financial deepening will hinder the economic growth. The reason is likely to be that the financial asset bubbles can’t bring economic growth and lacking of an effective support for the local economic development, and the small and medium-sized banks cannot play an important role. Thus, it is necessary to pay attention to strengthen the leading role of state-owned banks towards the economy.2. The financing structure of Yunnan province have the similar effect on economic growth. But financing structure influences economic growth weakly, and it had a little contribution to economic growth. On the contrary, economic growth can affect financing structure. Therefore, we should develop the economy, and then help the development of securities market to form the benign interaction.3. The structure of the financial efficiency is the Granger cause of economic growth. However, financial efficiency has the time-lag effect on economic growth, and it reached the maximum in the third period, the stabilized. All of these suggested that financial efficiency acts as an essential role to economic growth, so we should pay attention to improve financial efficiency.