The Research On The Relationship Of Chinese Banks Development, Stock Market Development And Economic Growth

Finance as the core of modern economy has an important role in economic growth. Since Chinese economic reform, the economic and financial developments have been fast, however, the rapid economic and financial development can not cover up the gap between different economic growth and financial development imbalances in different areas, it will inevitably affect Chinese overall economic development. Therefore, to explore the relationship between the regional economic growth and financial development has important theoretical value and practical significance in the promotion of regional economic development and improve regional imbalances in financial development. Banks and the stock market as two important components in a financial system who play an important role in economic growth, so it is necessary to divide the financial development to the banks development and the stock market development.Given the above analysis, this paper attempts to explore the relationship of Chinese regional banks development, the stock market development and economic growth. At first, this paper describes the comparison financial theory, financial function theory, Blackburn theory which is this paper supported. Then, analysis the relationship of the regional banks development, the stock market development and economic growth using1999-2009panel data of31Chinese provinces from the regional economic perspective, examine the relationship of regional banks development and the stock market development, and the influence on regional economic growth. Meanwhile, in view of possible endogenous variable problem, it is necessary to estimate the robustness of the results of further tests, for the use of dynamic panel data model re-estimation.The empirical results show that:in the country, the banks development and the stock market development are showing a complementary and mutually reinforcing relationship; In terms of economic growth, the banks development and the stock market development are promoting economic growth, this conclusion in accordance with Blackburn consistent theory and financial development theory. For regional level analysis, the banks development and stock market development in the region showing a gap, the eastern region are better than other regions, central, western and northeastern regions is close. In addition, the analysis show a complementary relationship (not significant substitutes relationship for the Northeast region). In the analysis of the relationship of the regional banks development, the stock market development and economic growth, we found both on the regional economic growth is different, in which the eastern banks development and the stock market development has a positive effect on the regional economic growth, but central, western and northeastern regions have shown no significant impact.