An Empirical Study On The Effections Of The Capital Allocation Efficiency Caused By Financial Development Of Zhejiang Province

Capital is an important source of economic growth,it has an extremely important effect on acountry or region’s economic development and growth. Improving the capital allocation efficiencyplays an important role on promoting a national or regional industrial transformation and growthpatterns.On the current, in the background of the urgent need for transformation and upgrading ofChina’s economy and the world’s economic growth slowed, we can not continue to rely on ourways of high input, high consumption to promote economic growth.Therefore, we have tooptimize the capital allocation and improve the capital allocation efficiency by ways of financialdevelopment which is an important way to translate China’s current economic growth mode fromextensive to intensive type,also it is the key to optimize the economic structure and accelerateeconomic development.Zhejiang province has highly developed economy and finance, whose capital accumulationamount is relatively richer than other areas of China.So it can represent the level of financialdevelopment of the Yangtze River Delta region or even China’s advanced level of financialdevelopment.This paper refers Jeffey wurgler’s model of capital allocation efficiency calculationand combined with relevant statistics of Zhejiang Province, then takes empirical researchs on thecapital allocation efficiency of Zhejiang Province and the impactions on capital allocationefficiency caused by financial development of Zhejiang Province,in order to analyse the capitalallocation efficiency and the degree of financial development of China’s economically developedregions from a regional view. It is contributed to have a clear understanding of the capitalallocation efficiency and the level of financial development of Zhejiang Province. In addition, ithas an important guiding significance of the proper understanding and evaluation of the effectionsof China’s financial development on the improvement of the capital allocation efficiency andpromotions of the healthy and sustainable development of the economy.This study shows that the overall capital allocation efficiency of Zhejiang Province is still on alow level, financial development has failed to effectively improve the capital allocation efficiency.The main reason is: financial development of Zhejiang Province foucus on the mounts of capitalrather than the efficiency of capital allocation, the incompletement functions of financial market, the disorder structure of capital market. Finally, this paper puts forward some recommendations ofthe improvement of financial development of Zhejiang Province based on empirical conclusionsand related causes, in order to improve the efficiency of capital allocation.