An Empirical Study Of China’s Financial Structure And Economic Growth

The modern economy can be regarded as financial economy in a certain sense, but theessence of financial development is the financial structure optimization, which reflects thefinancial development’s level and depending degree. Our country’s financial industry hasalso improved with the rapid economic growth, but, at present, the financial structuredoesn’t adapt to the economic structure. At the same time, our country is in a key to adjustthe economic structure and financial system reform. So, how to adjust and optimize thefinancial structure and improve the resource allocation function has become the focus ofresearch problem in China’s economic and financial development.In this paper, the main content is as follows:ChapterⅠ was the introduction which introduced the background and significance ofrelationship between financial structure and economic growth, combed the domestic andforeign relevant researches, and introduced the research ideas, research methods, theinnovation points and deficiencies.Chapter Ⅱwas an overview, which introduced the theory of financial structure andsome related empirical methods used to study the relationship between financial structureand economic growth. This chapter laid a theoretical foundation for later analysisChapter Ⅲstarted from the practical point of the financial structure’ development,through descriptive statistic analysis, explores the present situation and characteristics offinancial structure in our country.Chapter Ⅳ mainly is the empirical analysis,in this chapter analyzed the relationshipbetween financial structure and economic development of our country from the perspectiveof the overall. Specific contents have the model in this article, the estimation methods,variable selection, data collection, model estimation and testing, the results analysis, etc.Chapter Ⅴstudied the situation between different areas. Mainly by constructing paneldata model, from the inter-provincial and three regions analyzed the relationship betweenfinancial structure and economic growth in our region.Chapter Ⅵ summarized theconclusions of previous empirical research, and in orderto enhance the economic development’ comprehensive strength, based on the results ofempirical analysis, at last put forward some reasonable suggestions about the financialstructure optimization and the financial system reform, etc.In this dissertation, there are some innovations:The establishment of the model: the focus of this article is to analyze the relationshipbetween financial structure and economic growth, but in fact, economic growth effected by many factors. Therefore, in order to make the model more comprehensive and perfect,other factors also should be taken into consideration. In view of this, in paper we took thefinancial structure as one of influence on economic growth and introduced into the modelby consulting the input-output model of the Cobb-Douglas production function, thenestablished the model we need.About the method:(1) In thesis have selected some indicators to measure the financial structure, but founda strong correlation between the indicators by verifying, so in order to make variables havebetter representative, also hope to avoid repetition of information, before the empiricalanalysis, used the method factor analysis, use the common factor to instead the explainedvariables;(2) Based on cointegration theory, from the aspect of dynamic study of long-termdynamic equilibrium between financial structure and economic growth relations, and usethe variable coefficient panel data model to measure different provinces and the eastern,central and western regions’ impact on economic growth;(3) After the regression estimation of model, we found that there is multicollinearitybetween the variables that affect economic growth, which affects the regression estimationaccuracy. In this case, gave up the least-square method with unbiasedness, instead of theridge regression estimation, make equation regression estimate more practical.