An Empirical Study Of Guangxi Banking Development And Economic Growth

With the deepening of China’s economic and financial reform, The financial sector has close contact with the various areas of the real economy, and showing a growing influence. On the other hand, financial industry itself is an independent service sector, contribute directly to economic growth. In developed countries the financial sector value accounted for15%-20%of the gross domestic product (GDP), to explore the relationship between financial development and economic growth has become increasingly important theoretical and practical significance. For the province of Guangxi, so that the level of economic development is lagging behind, the banking sector plays an irreplaceable important role in supporting local economic development, and the services of local economic construction. In recent years, China-ASEAN Free Trade Area achieved rapid development as well as the Beibu Gulf Economic Zone building efforts gradually increased, more and more opportunities for development in the same period in Guangxi superimposed, provided by the state key projects to promote the development of Guangxi. Guangxi’s economic development faces unprecedented opportunities. Meanwhile, Guangxi Banking showed the same trends of surprise, deposits and loans have been expanding, and the ability to integrate resources continued to improve steadily as a result of improving overall competitiveness, provide strong financial support for economic growth and development in construction of the Guangxi Zhuang Autonomous Region. Research results of this paper draw on relevant theoretical and empirical analysis of the relationship banking sector development and economic growth at home and abroad, using1985-2011annual data, utilizing the ADF test, Johansen cointegration test, Granger causality test based on the VAR model impulse response function and variance decomposition technology, measurement methods, and empirical study on the relationship between banking sector development and economic growth in the Guangxi Zhuang Autonomous Region. For conclusion, in the long term, the asset size indicators which is measured by financial ratios (FIR) play a positive role in promoting investment and economy growth, on the other hand, the relationship between indicators of banking efficiency (EFF) and the real economy growth is not significant. Finally, based on the earlier comparison and measurement, make the suggestions of promoting Guangxi’s further economic and financial development.