The Financial Structure And Economic Growth Relationship Of The Application With Space Panel Econometric Model

China’s financial structure and economic development exists the imbalance between regions. With the rapid development of substantial economy, the financial system promotion cannot follow it in time, which caused the imbalanced phenomenon. At the same time, the imbalanced phenomenon show the obvious spatial agglomeration in regions of financial structure.So studying the relationship between financial structure and economic growth can provide the scientific basis of resolving the financial structure imbalance.Construct the index system of financial structure then comprehensively analyze the status quo of China’s financial structure from vertical and horizontal. Calculate the composite score of financial structure by Factor Analysis of panel data. Compare the development of China’s 31 provinces financial structure. Analyze the relationship between financial structure and economic growth with Spatial Econometric Model. Select the Real GDP per capital as dependent variable and when analyzing the influence of financial structure on economic growth. And select direct financial factor score and indirect financial factor score which are calculated by Factor Analysis as economic growth independent variable. When analyzing the impact of economic growth on the financial structure, select the composite scores of financial structure as dependent variable and the Real GDP per capital as independent variable. By studying the relationship between financial structure and economic development, propose appropriate policy recommendations to provide a theoretical basis for the government to formulate relevant policies.The results are as follows. (1)China’s Financial Interrelations Ratio is fluctuated upward in the overall trend. Securities market accounted for the proportion of economic development has a tendency to rise, but volatile. The development of the insurance industry is still not perfect. The banking system in China’s economic development still plays a very important role, but the effect has a tendency to decline. The eastern financial structure develops rapidly but western and central regions slowly. Especially the non-bank system development in central region is most backward. (2) Composite score of financial structure by Factor Analysis of panel data shows that China’s financial structure presents gradually decline from east to west and spatial agglomeration phenomenon. (3)Moran Clustering Map and Local Indicators of Spatial Association shows China’s financial structure and economic growth has positive spatial spillover effects. (4)The regression results about the effect of financial structure on economic growth with spatial panel data model shows that:Since the Spatial autoregressive coefficient of economic growth is 0.1650, there is significant spatial spillover effect on economic growth. Direct financial factors and indirect financial factors of parameter estimate is 0.0659 and 0.0498, respectively, in either direct or indirect financial structure, has a positive role in promoting economy growth, also indicate the direct financial structure is more obvious in promoting. The parameter estimate of direct financial factors and indirect financial factors with standard panel data model is 0.0597 and 0.04474, which compared to the parameters of the spatial panel data model is lower. Without considering the spatial effect, the model exist setting errors and the estimation results has deviation with real situation.(5)The regression results about the effect of economic growth on financial structure with spatial panel data model shows that: Since the Spatial autoregressive coefficients of financial structure is 0.5149,there is significant spatial spillover effect on financial structure. The parameter estimate of economic growth is 0.8045 which indicate that economic growth plays a significant role in promoting financial structure.Overall, there is a two-way promoting effect between financial structure and economic growth in China.Therefore, provide some suggestions based on the results as follows. Strengthen the development of direct financial structure and improve the quality of the real economy. Accelerate the financial reform and financial innovation. Create a good external environment for the development of the financial structure about the central and western regions.Taking the advantage of the spatial effect of financial structure and economic growth, the fast developing areas promote the slow developing areas by radiation effect.