Research On Regional Financial Development And Economic Growth Of Zhejiang

ABSTRACT:As an important economic subsystem, finance is playing an increasingly prominent role in modern economy. It has caught lots of attention from foreign and domestic scholars in recent years that what is the role finance plays in economic development. Foreign scholars build a diverse theoretical system,they create and use series of empirical tests to study the relationship between financial and economic development. Domestic studies have a late beginning but a rapid growth on width and depth.This paper focuses on the Zhejiang Province, as it was the earliest reform and opening up province of China and most developed province. Firstly, the paper summarizes the domestic and foreign researches and theories, then divided Zhejiang Province into three geographic regions as northeast of Zhejiang, southwest of Zhejiang and south of Zhejiang. Secondly the paper analyzes the financial and economic differences between regions from several aspects, as financial scale, financial efficiency, financial structure, total economy and industrial structure. Thirdly, by building a finance-related ratio, a financial efficiency index, a capital market development index and a insurance market index, the paper uses these indexes to make correlation analysis and empirical test. Regression analysis method is further applied to analyze empirically the relationship between financial development and economic growth, drawing the conclusion that financial development advances economic growth.Based on the general analysis and empirical tests, the paper goes on to analyze and summarize the financial factors impacting the economic growth, and put forward suggestions to further deepen the financial reform.