Empirical Analysis Of China's Stock Market Development And Economic Growth Relationship

After ten years of development, our country' s stock market has founded stable mechanism, but is still on the initial stage and has flaws in stock issuing, stock structure, and operation mechanism and so on. Analyzing the relation between stock market and economic development, revealing the effect of stock market on economic development and further revealing the prospect of stock market and the potential of economic development is not only the prerequisite to understand the position where our stock market is in economic development, but also play important role in developing stock market and even the whole country' economy.First we review foreign and domestic scholars' research on the relation between stock market and economic development, then adopt the model of Levine and Zervos , 1998, choose some variables about stock market and two controlling variables, and do regression analyses to GDP growth rate. As a result, we realize the stock market size promotes economic development, and the stock liquidity is not remarkably related with economic development. This shows that our stock market is a low level market and only has the financing function, and we should take measures to promote resources allocation of stock market.