Chinese Stock Market Development Of Contribution To The Growth Of The Economy

The stock market, as part of the financial market, which effects the development of the economy should not be ignored. General theory is said that the stock market can be through the wealth effect, resource allocation and diversification to affect the economy. Throughout the country’s huge research literature, most scholars use foreign research method, using China’s data to simulate, index selection more relative index. This paper is based on the former research, using the original absolute data to analyze the Chinese stock market and the secondary market level influences economic growth. With the primary market using finance to represent, the secondary market using turnover and market value to represent, and then the author examines them with economic growth (with nominal GDP represent) of the relationship.In this paper, according to the traditional understanding of the theory, using the least squares regression, then Granger causality test, analyze the conclusion shows that the amount of China’s stock market financing have a positive correlation with economic growth, but economic growth is to expand direct financing reasons, which can show more of the stock market reflected a financing function, the resource allocation function not functioning. Turnover and economic growth have a positive correlation and interlinked with one another, which can show that China’s stock market wealth effect larger. Market and economic growth, there is positive correlation between, but economic growth is the reason the stock market scale, indicating the number of China’s stock market is not only on the quality of primary re-development features. As a result of this article is to study the development of stock market and its impact on the economic’growth, regardless of market value and the amount of financing, and economic growth of trading volume to establish VAR model impulse response analysis. The results show that in the case of lag2to give a positive impact on market turnover, the impact on GDP reached a maximum in the second year, and is negative. And previous academic studies in order to get the same conclusion, so that the stock market bubble will lead to economic recession.Throughout China’s Shanghai and Shenzhen Stock Exchange since the establishment of the development of stock market, we can find that although the capital market of our country has made great progress, but there are a lot of regulations and laws and regulations to be perfect, our country stock market scale although reached the international forefront, but the market efficiency is very low, the stock market function has not been able to play very well, my country the stock market is still a weak form efficient market. According to the conclusion of this article, from our country stock market supervision to market, to market itself and the participants, made specific recommendations.