The Difference Research Of Relationship Between Financial Development And Economic Growth In Six Provinces Of Central China

Financial problem is one of core issues in the modern economic research. The research achievements in last hundred years indicate that it exists a closest link between financial development and economic growth. In December2004,’Rise of central China’, this national strategy was established in central Economic Work Conference. Meanwhile, the slogan of’Central China Rising, the finance first’was came up in provinces. However,there are no unifying results about the casual relationship between financial development and economic growth in academic circle. How to through financial development to promote economic growth by six central provinces is a worthy of study. This dissertation chooses the six central provinces(Anhui, Jiangxi,Henan,Shanxi,Hunan and Hubei privince) as sample to research the regional differences of relationship and in a certain,to make up the shortage in this research field. And its one pratical significance is that these six central provinces play the roles of linking the east and west area of China as well as the south and west area in overrall strategy about regional development. And the other significance is that it is a important hub to maintain comprehensive, coordinates and sustainable development. To study the relationship between financial development and economic growth, it is benefit for government to formulate the economic and financial policies from practical situations. And helps the central region development economy and finance.This dissertation states the international mechanism between financial development and economic growth and also summaries the existing research methods. On this basis, the level of financial development is evaluated from three perspectives that is financial deepening certain, financial assets scale and financial efficiency. Furthermore, using the growth rate of per capita GDP measures economic growth level.In the empirical analysis part, i use the stationarity test, cointegration test and granger cause test to analyze the financial development and economic growth in six provinces of central respectively. Inspection result is that there are highly positive correlation between financial development and economic growth in Shanxi Province, but no granger cause relationship between the indexes. In addition to the Shanxi Province, the other five provinces economic growth is the granger cause of the degree of financial deepening, there is a unidirectional causal relationship between the degree of financial deepening and economic growth in Henan province. In Anhui and Jiangxi province financial assets scale is the granger cause of economic growth, its financial efficiency is the granger cause of economic growth. In Hunan and Hubei province economic growth is the granger cause of financial asset scale, its financial efficiency is the granger cause of economic growth.According to results above, the six central provinces are divided to two groups to analyse their differences,the one group includes Anhui,Hunan and Henan province and the other group includes Jiangxi,Hubei and Shanxi province. The conclusion is that the finance of Shanxi province is excessive deepened as high-speed development. It seperate the financial development of Shanxi province from its real economy. However, oppositly, the financial deepening of Henan province is not enough. There are huge total financial assets can be used better. For other provinces, the financial deepening speed is too fast in Anhui provinces. It needs reasonable development. The level of per capita and total economy is lower in Jiangxi Province. Its economic growth can be promoted by expanding financial assets scale. The economic development of Hunan and Hubei province is in leading level. But from the perspective og casual relationship, it needs to shift the focus from expanding the assets sacle on to establish the healthy interactional mechanism between finance and economy.