Empirical Studies Of The Relationship Between Capital Market Development And Economic Growth

Related researches indicate that there exists sort of relationship between the development of capital market and economic growth. Therefore, in-depth systematic analysis of the intrinsic relationship between them and revealing of mechanism and effectiveness of capital market affects economic growth is the prerequisite for objective understanding the role of capital market in domestic national economy and further promoting the development of capital markets.Since the 90s of last century, China's long-term bank credit, stocks and bonds and other financial markets have developed very rapidly and have made considerable progress. Our domestic capital market, whose operation has gradually become standardized and efficiency has also improved greatly after taking shape, has become the significant part of domestic market economy and made considerable contributions to our country's financial reform and development, resource allocation optimization, economic restructuring and economic development.Based on the existing research results, this paper extends empirical studies on the relationship between capital market development and economic growth, combined with the actual development of China's capital market and economic development of Hunan Province. We first analyze their relationship theoretically and clarify three major mechanisms that capital market promotes economic growth. Thereafter an overall description of the current situation for Hunan Province's capital market and its effect on the economic growth is presented, and unit root test, cointegration test and Granger causality test and other mathematical measurement methods are applied in the process. Besides, Hunan Province is taken as an example for a detail empirical study. Finally, the problems in the promotion of capital market to Hunan Province's economic growth is analyzed and corresponding suggestions are proposed regarding to how to better promote and improve Hunan Province's economic growth through capital market.