Empirical Analysis Of The Relationship Between Financial Development And Poverty Alleviation、Income Distribution In China

Domestic and foreign academic circles never stop the exploration of the problem of poverty, because poverty is one of the major problems of the people’s livelihood, which plays a crucial impact on the development and stability of the economy. So under the background of building up the harmonious socialist society, it is worthwhile to secure the relationship between the financial development and poverty alleviation to implement policies in favour of the poor. It also points out financial development as another good way to reduce poverty.The thesis firstly reviewed the literatures on the relationship of financial development and poverty alleviation and pointed out two approaches to alleviate poverty. One was the direct approach(from financial development to poverty alleviation), the other was the indirect approach(from financial development to economic growth and then to poverty alleviation). Then it analyzed the relation theoretically from the points of macroscopical and microcosmic view. From five aspects it figured out what the financial development was. After the comprehensive description on the achievement and the deficiency of Chinese financial development and poverty alleviation, this thesis took an empirical research on the relation between financial development and poverty alleviation.In this paper, in order to find out whether our country’s financial development improve poverty alleviation, I choose the time series dataset from 1978 to 2013,from the point of nationwide and countryside, imply the ADF unit root test, Johansen cointegration test, impulse response, and Granger causality test. And then I select the 2007-2012 prefecture-level cities’ actual data, using static panel regression, from a national point of view and analysis to verify the influence of financial development for the income gap.The empirical results are as following: ①financial development mainly relied on the indirect way to affect poverty reduction, that through the economic growth; ②from the perspective of countrywide, the scale and efficiency of financial development made positive effect to poverty reduction while the structure of financial development was negative; ③from the perspective of countryside, the effect from the scale of financial development was still positive while the structure and efficiency of financial development were negative. On the basis, this paper put forward some suggestions to make finance improve poverty alleviation in the future.