Study On Effect Of Financial Structure On Economic Growth Quality

Since the 1978 reform and opening up, China’s rapid economic growth has made remarkable achievements. However, the impact of economic development is not only the outcome of economic growth rate, as well as the quality of economic growth. With the rapid growth of China’s economy, many contradictions and problems are gradually exposed. Environmental deterioration, low utilization of resource, widening gap between rich and poor, imbalance of industry structure and other issues become more prominent, these outstanding contradictions and problems is essentially an problem of economic growth quality. We can say that the quality of economic growth has become an urgent issue of China and the world. Central Economic Work Conference held in December 2014 also clearly stated the economy overall work requirements that "adhere to improve the quality and efficiency of economic development as the center". Abandon the inherent thinking has become the consensus of the country down. In this context, exploring the factors of the quality of economic growth is of great significance to the Chinese economy to achieve sustainable development in the future.Finance plays a significant role of allocating resource so that be called the core of modern economy. The essence of financial development is to optimize the financial structure. Since the eighties, China’s financial system has undergone tremendous changes, began to shift from a highly single financial structure to a diversified financial structure. Especially in the ’90s, the market characteristics become more prominent. So far, the financial structure of bank-based, various financial institutions coexist has been built up. The impact of financial structure on economic growth drew more and more attention. However, the existing research on the relationship between financial structure and economic growth are mostly confined to the economic growth in the number analysis framework, there are few scholars to explore the impact of financial structure on economic growth from the perspective of quality of economic growth. This happens in China, a place urgent need to improve its economic growth model and solve the problems that caused by the rapid economic growth, is really a pity.Accordingly, this paper focuses on the relationship between financial structure and economic growth quality. First, This paper summarizes the existing research about economic growth quality, and constructs the evaluation index system of economic growth quality which is composed of four parts,namely structure,stability,sustainability and welfare. And it empirically studies the effects of financial structure on economic growth quality by constructing the GMM and using the provincial-panel data in China from 2001 to 2012.The results show as follows:the increase of the proportion of direct financing could improve the quality of economic growth;direct financing does better than indirect financing at growth sustainability, whereas direct financing intense the economic fluctuation and the loss of social welfare to some extent.