The Correlation Analysis Of Financial Development And Economic Growth Of Jilin Province

Since1978, our country economy have grown consistently after the Reform. Inrecent30years, finance, with the rapid economic growth, develops fast, whichgradually becomes a means of macro-economic control and an instrument ofresources distribution. And to a certain degree, the development of financecontributes to the growth of economy. Thus they are interrelated and interact on eachother.In recent years, finance of Jilin Province maintained good momentum ofdevelopment, but we can not deny the fact that the financial development of JilinProvince is still low when compared with national average level. Therefore thefinancial development of Jilin Province has a lot of weakness. For one thing, financein Jilin starts late, lags behind and has a series of problems, such as poor financialecology, lack of a social credibility system, excessive intervention from government,low economic efficiency. For another, within the financial industry, the mechanismsof financing are not perfect, which directly give rise to obstacles on financing ofsmall and medium enterprises and private enterprises. And the slow development ofsmall and medium enterprises and private enterprises also exert numerous debasingimpacts on the economic growth in Jilin. As a result, lagged financial industry maynegatively influence the economic development of Jilin Province. And this paperanalyzed the correlation of financial development and economic growth of JilinProvince and then give some reasonable suggestions.There are four parts in this paper. The first part is an introduction. It introduced the background, the meaning, the research method and the general research progressof this paper.In the second part, there is a literature review about financial development andeconomic growth. This chapter divided into3parts: the research summary offinancial development, the research summary of economic development and theresearch summary of their mutual relation.The third chapter collected and processed the data related to the financialdevelopment and economic growth of Jilin Province, and then described and analyzedthe present state of the financial development and economic development of JilinProvince. Firstly, this part described the present state of the financial development ofJilin Province in three fields: banking industry, securities industry and insuranceindustry. Secondly, it analyzed the present state of economic development of JilinProvince in four aspects: the economic development course, the industry structure,the comparison with other provinces and the comparison of cities within JilinProvince. Finally, we summarized the general relationship between the financialdevelopment and economic development of Jilin Province as well as their problems.The fourth portion is the empirical analysis. Firstly, this chapter chose GDP asoriginal index to express the development of economy and chose the sum of bankingdeposits and loans(BL), the total market capitalization of listed companies in JilinProvince(ST) and insurance premium(IN) as original index to express thedevelopment of finance. Based on these indexes, we studied the multiple regressionbetween the financial development and the economic development of Jilin Provinceby using principal component analysis. Secondly, this chapter deeply studied thecorrelation between GDP and finance interrelation ratio(FIR) with unit roots test,cointegration test and Granger causality test. Finally, we found that the financialdevelopment and the economic growth of Jilin Province did not form interactionmechanism. Based on the results of empirical analysis as above, this paper brought forward a series of opinions and strategies for the advancement of the economicdevelopment and the financial development of Jilin Province.