Financial Development And Regional Differences In Research On The Impact Of Economic Growth

There are three main ways of sustained economic growth:the first is the accumulating of elements, the second is the upgrade of economic structure, the other is the renovation of techniques, and capital is the essential elements to promote economic growth of the three. The basis of the standardization of market economy is high monetization and credit, therefore, finance becomes the core part of the modern economic system, and the financial development turns into the binding index of a country’s economic growth.This paper strictly defines the definitions of financial development and its regional differences, seriously reviews the research on the relationship between financial development and economic growth, regional financial theory and regional economic theory, and systematically summarizes the theory of financial development and economic growth. From the current actual situation, this paper reveals the influence factors of economic growth; they are capital, resources, labor, and institutional factors, technological progress and human capital. Then it focuses on the in-depth analysis which is on the way of the financial development affects economic growth, and summarizes that financial development affects economic growth by changing the savings rate, investment activities and decisions of financing efficiency.This paper summarizes the current situation of economic and financial development in Jiangsu Province, and takes financial development into the production function as a factor, through the1990to2010Jiangsu’s GDP, financial development, capital stock, human capital co-integration test and regression, to sum up Jiangsu’s financial development’s influence on economic growth. Through the empirical, it obtains that financial development plays a significant role in promoting economic growth, but with the growth of economy, the degree which economy depends on finance is reducing, this paper uses the Theil index to measure the differences of the economic growth and the financial development between three regional in Jiangsu Province. Finally, on the building and analysis of Panal Data model and analysis, make a return to the three major regional’s financial development on economic growth, confirmed the differences of the degree which the financial development affects the economic growth between the three regional, and the answer is the maximum is Sunan, the second is Suzhong, and the least one is Subei. The flexibility of financial development is high in more economically developed areas.Last, Through theoretical analysis and empirical research, this paper proposes some policy recommendations, such as:Strengthen policy support to narrow gap between the regional economy and finance, improve the institutional mechanisms to strengthen regional economic and financial integration, highlighting the allocation of resources to optimize the structure of the regional economy and finance, and innovative development ideas to expand the economic and financial scale in Jiangsu.