The Empirical Analysis On The Influence Of Financial Development Over Export In Sichuan

As China’s reform and opening up policy has been issued for three decades, the globalization becomes the trend of world economic development. Financial and trade are so important to economic growth, so financial development and export trade’s relationship is a major concern. Scholars pay much more attention to the intrinsic link between the two.About financial development, American economist Gurley.Shaw (1960) considered that financial development is the increase of financial assets and financial institutions. Since then, Goldsmith (1969) creatively put forward a series of financial development indicators, of which the most important is financial interrelation ratio. Edward.Shaw (1973) and Ronald. McKinnon (1973) based on the actual situation of developing countries put forward the new theory of financial repression and financial deepening, they believed that "financial development" equals "financial deepening" or "financial liberalization". To conclude, the financial development is the increasing number of financial assets and institutions. Export trade means production and services from a country or region export to foreign market. To study the impact of financial development over the export, we must first accurately understand the level of development of export trade, while trade volume and trade structure is the important evaluation measures.Sichuan Province is an important province of western China, although the financial and trade have achieved good development results guided by the reform and opening up policy, the breadth and depth of financial openness or the size and structure of the export trade still have some problems. In1978, Sichuan’s total foreign trade volume has only0.4billion U.S. dollars. To2009, total exports also set a record of14.15billion U.S. dollars, ranking first in the western. After deeply observed, it can be found that Sichuan export scale and structure have a greater gap compared with other developed provinces. Since the reform and opening up, financial development present a similar trend as export trade in Sichuan, and financial business carried out great development. Developed regions’experience shows that export is inseparable from the financial sector. The financial sector can reduce the markt risk, allocate resources, mobilize savings, and facilitate trade functions. So the financial development is an important factor over export trade.This topic is a foremost issue, whereas the previous researches are very rare, so this article introducing the theory to a more small-scale region has great theoretical and practical meanings. Theoretical meaning is that the theory of finance and trade has long been independent. Therefore, to explore relationship of financial development and export trade will have theoretical support in area. The practical meaning is that using empirical analysis to measure the impact of financial development over export, structure, by learning the advanced experience of regional financial development, in order to build harmonious relations between financial and trade and put forward policy recommendations.The main content of this paper are as follows:The first chapter is the introduction section. Firstly, it introduces the research background, meaning, structure and research methods; Secondly, it described the related concepts.Chapter II is the theory and literature review. This chapter firstly reviews the theories of financial development; secondly, it described the impact factors over international trade; finally, many scholars’study indicate that financial development does affect the export trade.The third chapter is the mechanism between financial development and export trade. It describes the mechanism from comparative advantage, the risk spread and trade opening.The fourth chapter is the overview of the financial development and export trade in Sichuan. According to the history, the two sectors have taken place big changes, but compared with the eastern coastal developed areas there are still large gaps.Chapter V is the quantitative analysis. Based on previous theoretical analysis, I use regression analysis method to reasech the impact of financial development over export over Sichuan. Chapter VI is the conclusions and policy recommendations. According to the theoretical and empirical conclusions, I put forward some suggestions, drawing on the typical successful experiences on how to further speed up financial reform.The paper has two innovations. The first one is the study of financial development and export trade relationship. The second one is using quantitative analysis to explore the influence of the financial development over export trade in Sichuan.This paper is expected to give the conclusion that financial development has significant impact over export trade, but the final conclusion is unclear. The difficultis lay in that the theoretical depth may be not enough and the empirical model is imperfect. These problems will be corrected and expanded in the future.