Demonstration Of Financial Development And Economic Growth In Liaoning Province

Economic growth is the hypothesis of the social development and stability, and finance is the core of the economy, so it’s particularly significant to study the relationship of the financial development and economic growth. The question is also the concernment in the west academic circles, and the study shows that financial development and economic growth is correlated. The mature and stable financial market would broost the economic development, and economic growth would in turn broost the financial development, shaping the benign mechanism. The research on this problem is late and the relevant research conclusion is not consistent when compared with the foreign countries, and this consequence may as the result of our country’s economic development at present.The northeast area economy development has greatly improved from the strategy-revitalize the northeast old industrial base-is put forward in2003,and Liaoning economic is developing rapidly as the one of the important provinces of the northeastern industrial base. The economic growth rate is by double-digit average in Liaoning province. However, the liaoning financial development level is relatively low and still have a certain gap when compared with China’s average level because of the late starting time, despite the fact of the rapid development rate.And this phenomenon results in the fact that financial support is the important base in the economic development showed by the experience of many areas. Without the strong financial support, liaoning economy development with such a high growth rate remains to be seen in the future.The backward financial industry will hinder liaoning economy growth obstacles? And which relationship is between the financial development and economic growth? The article shows the correlation between financial development and economic growth, in order to promote liaoning’s economy more healthy, stable and rapidly.This paper includes the following five parts:Chapter I is the introduction. In the first place, this part describes this research’s the significance and background.Secondly, this part sorts of foreign literature, summarizes the research methods and research results of foreign scholars. Then the article briefly introduces domestic scholar’s study, and summarizes the research results of domestic scholars. Finally this part describes content and methods of this paper.Chapter II is the mechanism analyzes the mutual influence between the financial development and economic growth. This part would firstly define financial development as the evolution of the financial system and modernization, including basic situation of financial market financial institutions, tools and system, and briefly introduce the banking, securities and insurance. Secondly, the article introduces the western scholars’theory how the financial development influences economic growth from the financial system’s function in the financial industry. The author introduces, at last, the theory that the economic growth promotes the development of financial theory.Chapter III is development status of economic and financial of Liaoning province. This section describes the operation of the economic of the Liaoning province during the15years from the1996to the2010.Firstly, the article describes the operation of the economic of the Liaoning province, and analyzes simply the total output and the condition of the industrial structure, through the present of the Statistical data, shows that the unreasonable of the industrial structure of the Liaoning province which takes the upgrading of the industrial structure. Secondly, the article analyzes the operation of the financial of the Liaoning province, the statistical data shows that the development of the financial industry is very fast, but the starting point is low, the financial industry is still backward. The proportion of the financial industry in the total regional GDP is lower than the national average, the article analyzes the development condition of the banking、security、insurance, the statistical data shows that they all develop fast, but still have some problems。 the article analyzes the situation of the investment efficiency of the Liaoning province, the statistical data shows that the volume and efficiency of investment of the economic of the Liaoning province increased steadily during the15years. Chapter IV is a validation test of the model, it’s the core part of the whole research. Unit root test, cointegration test, granger causality test, impulse response function and variance decomposition have all been used in the model to analyze the relationship of financial development and economic growth. According to those statistical methods, we found that financial development is the unidirectional causality of economic growth,that is to say the financial development of liaoning has promoting the growth of economic while economic growth hasn’t promoting the development of financial departments. A possible explanation for the phenomenon is that liaoning province’financial industry still in its infancy.Chapter V is conclusions and policy recommendations. Conclusions of the content and make meaningful policy implications. Accordingly, the paper put forward the following recommends for improving the effectiveness of financial systems to promoting the development of economics:deepening the reform of the banking systems, improving the quality of financial products and the efficiency of the financial systems; advancing the improvement of the market building and the construction of atmosphere; reducing the differences of access to finance for non-state-owned economy.