| Throughout three decades of China’s economic development, an overall stable and rapid economic development can be found in China, and China’s economic reform gradual has made great achievements gradually, but the financial system which lags behind the economic development is constantly completing. As the continuous deepening of the reform, finance plays an more and more important role.It can be seen From international and domestic theory and experience that finance is the core of modern economic development and is also one of the important factors which affect economic growth. The development of financial intermediation is always as an important comprehensive index that measures economic growth. The economic growth of a country or region can be greatly affected by the degree and the structure of the development of financial intermediation. Therefore, the relationship between development of financial intermediation and economic growth has been the object which scholars concerned about and studySince the1950s, the relationship between the development of financial intermediation and economic growth has drawn wide attentions, and a large number of studies suggest a strong link between financial development and economic growth. The are several main ideas:First, the financial intermediation promotes economic growth by converting savings into investment in social production (John·Gree and Edward·Shaw,1960); Second, the development of financial intermediation can promote economic growth while economic growth has an impact on the development of financial intermediation, showing mutually reinforcing relationship(Goldsmith,1969); Third, the development of financial intermediation promote finance, improve capital utilization, and promote economic development(John Hicks,1969); Fourth, the development of financial intermediation is in favor of putting social idle funds together to promote economic development and control inflation(Mckinnon and Shaw,1973). Starting from the endogenous growth model, given the capital-output function, in the condition of constant technological level, output will increase as an increase in invested capital, that is, the total amount of investment determines the total amount of output.So, expanding investment can promote economic growth. Financial intermediation plays a very important role in the process that savings convert into investment, it is because of financial intermediation has gathered capital and transforms capital into social production investments in the form of a credit or investment,and improve the utilization rate of the social capital, and ultimately promote economic growth. After a review of endogenous growth theory, in the economic system there are transformations in savings into investment, investment into capital, capital into production,and the product can be transformed into personal or corporate capital, while surplus capital transform into savings. This forms a chain of endogenous conversion of funds, capital utilization will be improved as technology continues to improve so that eventually forming a growth system. While financial intermediation plays an important role in the economy.Modern corporate finance theory proposes the theoretical framework of the issues that why a modern enterprise need financing and what is the optimal financing structure.It also describes that modern enterprises can use various means of financing to realize the expansion of the scale of the enterprise and to obtain other targets such as additional revenue in the development. Selecting the appropriate financing structure allows businesses to lower financing costs and make risks in the controllable degree, and achieve the maximization of corporate value. The theory of liabilities management give the necessity of the of debt management and what kind of benefits enterprises can achieve through debt management.From a macro perspective, this paper selected the gross domestic product (GDP) of the first quarter of2001to the third quarter of2012as indicators of national economic growth, while selected loans, the total market capitalization and insurance total revenue as the indicators which measure the development of financial intermediation. Through cointegration test it can be found that there exists a long-term stable mutually reinforcing relationship between financial intermediation and economic growth. Through the short description of the error correction model we can find the development of financial intermediation promotes economic growth, while a deviation from the development of financial intermediation also have an impact on the current economic growth and a deviation correction mechanism exists in the internal economy system which can correct the deviation. Finally causality test verifies the economic growth and development of financial intermediation are reciprocally causal and they can mutually reinforce each other in the long and short term.From the industry perspective, this article only selected an industry real estate in the economic system which has a high contribution to the Chinese GDP, so it can be seen the effect which financial intermediary development has on economic development from a study on the real estate. We still select three financial intermediary market index data in GDP study as variables while selecting the total sales in the real estate industry of the first quarter of2001to the third quarter of2012as a dependent variable. The results From the causality test suggested that banking market, stock market and real estate industry showed a causal relationship between them while from the result of the causality test between the insurance market and the real estate industry it was found that the insurance market is the Granger reason for the real estate industry unilaterally. Some relations mechanisms can be seen between the development of financial intermediation and real estate market development from the causality test results:(1)The development of banking market, stock market and insurance market will promote the development of the real estate market;(2) The development of the real estate market will significantly promotes the development of banking and securities markets;(3) The rapid development of the insurance market indirectly promotes the development of the real estate market.From coefficients of each variable in the model of industry research, the coefficients of variables are all positive except for the coefficient of the third-order lag insurance income amount. This indicates securities markets, banking and insurance markets in the economy are affecting the real estate market positively in other words development of financial intermediation and economic development are mutually reinforcing. Securities markets have the greatest impact on the real estate market but the impact of insurance market on the real estate market is much weaker and the banking market has common impact on the real estate market. Listed real estate companies which obtain most of its financing from the stock market should be greatest impacted by the securities market while under normal circumstances the insurance companies impact the real estate market indirectly through the stock market, in which most of the impacts are attributed to the securities markets.From corporate research, this article studys the relationship between fifty-six listed real estate firm’s total revenue and Financial intermediation, hoping to know more with doing less and find the impact financial intermediation has on economic growth. This paper selects the data of the first quarter of2002to the third quarter of2012. A positive relationship between growth of financial intermediary market and the revenue growth can be found from the results of the dynamic panel model estimation. Thus it can be seen that financial intermediaries investment in the real estate industry will promote the development of the real estate. It also happens to be a business card debt management theory:Within a certain degree of liabilities, the enterprise which chooses to use external debt financing method can obtain part of the financial interests. If corporate’s financial structure and the borrowing interest rate are fixed, with EBIT growth in earnings per share after-tax income grow faster and thus can earn some extra income through borrowing. For investors, the risk of debt investment is small, so requirements of its revenue are relatively low, so the cost of corporate financing is lower than that of equity capital form. The corporate can effectively reduce financing costs if the business take the debt financing and equity financing into consideration. There is a requirement of the accounting system:The interest expanses of corporate can be deducted before tax. Therefore, the way to raise capital through debt can reduce income taxes, as well as increase equity capital gains through leverage effect.Considering all aspects of the factors, that when companies raise capital through debt financing, it will reduce income tax and increase the potential gains, thus greatly reducing the original capital and improving capital efficiency. |
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