An Empirical Analysis Of The Relationship Between Financial Development And Economic Growth In China

Financial industry is the important industry of the national economy, plays a vital role. Since the reform and open policy, our country economy obtained the fast development of per capita income increased rapidly and deposit amount increased as well. Financial industry has gained rapid development, become an important means of government macro-control. Since the 12 th five-year plan, China’s deepening reform of financial system, financial highlighted the core position in the economy, the financial development of our country’s actuation effect on economic growth is obvious. In recent years, both domestic and foreign scholars have been more extensive research, suggests that the improvement of the financial market contributes to economic growth. A large number of empirical studies have shown that financial development and economic development has a significant causal relationship. The financial reform of our country into the deep water area, the function of financial market service entity economy further play, further to provide the source power for the transformation and upgrading of the real economy. As is known to all, China’s policy makers is the government, financial development also need government finances. Among these, under the perspective of the government, the relationship between financial development and economic growth in China as well as the mechanism is how to run, all need further study. Analysis and research in this paper, based on this purpose, make relevant Suggestions and opinions, and promote the development of the financial order smoothly, thus sustainable healthy development of economy.This article summarizes the overall situation of China’s financial development and economic growth, and combination of chart is more intuitive, expounds the present situation and the relationship of the two. With financial development scale index, efficiency index to measure the financial development level, select the economic time series 1978-2014, the total production function analysis framework, the level of financial development as input variable is introduced into the analysis model, cointegration test and impulse response analysis and empirical analysis. From the cointegration test shows that the government input and output growth, suggests that our country government investment has a good effect on economic growth. Financial development scale is positively related to economic growth, the development of China’s financial development scale in the direction of the good, the level of financial deepening is speeding up, the financial system to constantly improve the resource allocation efficiency. From the Granger causality test, 1978-2014 financial development efficiency is not the cause of the economic growth, financial development scale fir has a two-way Granger causality between economic growth and shows in the process of development in our country, improve the efficiency of China’s financial development is the important process of financial development. In the period 2000-2014 of granger test shows that financial development efficiency significantly promoted the economic development, it can be seen that with the development of financial reform in recent years, financial development efficiency has improved. In the current economic development, let the market leading economic development, improve the operational efficiency of the financial system. At the same time, the virtual economy and real economy coordinated development, financial repression and financial development scale is not conducive to economic growth too fast.