Study On The Relationship Between The Development And Economic Growth In China’s Stock Market

Relations between the stock market and economic is a problem economists payattention at home and abroad. Although foreign economists from the middle of the20th century began to study the relationship between, the result is also debated.China’s rapid economic development, the stock market has experienced tremendouschanges, especially the equity division reform began in2005, changed the ChineseA-share market listed companies internal generally formed the "two different natureof the stock"(non-tradable shares tradable shares, and social) situation, so as to makethe before and after the reform of non-tradable shares on the stock marketdevelopment and economic growth what influence has become the focus of attentionfrom all walks of life.In order to search the relation between stock market development and economicgrowth, this paper makes researches by stages before and after the split share structurereform by empirical approach.The first part is the introduction, this paper expounds the article the researchbackground, significance, literature review and research content and method.Secondly, it elaborates the approaches by which economic growth affects stockmarket development, and also, stock market makes a difference on economic growthby diversification disk, financing, information revelation, resource allocation, and soon.Thirdly, it determines that the indexes which decide stock market developmentare capitalization rate, transaction rate, turnoverrate and SSE Composite Index, andthe indexes which decide economic growth are GDP, fixed investments and PMI. Andthen, this paper researches the relation between stock market development andeconomic growth by empirical approach with methods such as JohansenCo-integration Test, Granger Causality Test and impulse response analysis.At last, the paper analyses the results obtained from the above chapters andoffers advices. It is known that a kind of weak correlation exists between stock marketdevelopment and economic growth before the split share structure reform, but the obvious benign development appears after the split share structure reform was carriedout.From the search of this paper, we know in order to promote the development ofeconomic, it’s significant to change the unreasonable structure and market system.