Empirical Study Of The Relationship Between Financial Development And Economic Growth In Five Ethnic Autonomous Regions

The economy of five ethnic autonomous regions gains a great leap with the support of “Grand Western Development Program”, and their economic growth rates are catching up with central region, southeast coastal area. However, after 2010, Chinese economic development goes into a brand-new period,on basis of lagging economy in five ethnic autonomous regions, the effect of finance on local economy and the difference of financial developments level between five ethnic autonomous regions and central region,southeast coastal area are worthy of research and dealing with immediately. At the same time, the previous researches are far, further studies are needed about the relationship between financial development and economic growth till 2013,what kind of achievement of five ethnic autonomous regions' economy and finance has made and whether there are common problems or not. This paper is focused on the questions above, analyzing the relationship between financial development and economic growth of five ethnic autonomous regions systematically and comprehensively, which is meaningful for ethnic autonomous regions' economic development.This paper is based on Financial Development Theory, Financial Repression Theory,Financial Deepening Theory. Financial Development Theory mainly studies the intrinsic relationships between financial system and economic growth, only on this angle can grasp the historical meaning as well as the intrinsic development logic of Financial Development Theory accurately, and then know about its future development trend. The earliest proponents of Financial Repression Theory and Financial Deepening Theory apply these theories on analyzing the relationship between financial development and economic growth of developing countries, these become one of basic theory for financial development model.There are many domestic and overseas experts, scholars have made research on the relationship between financial development and economic growth, from these studies we can find that overseas experts and scholars insist that traditional agricultural countries and areas should implement financial protection policy rather than financial openness, domestic researches are just about one province or one ethnic autonomous region. Nevertheless, this paper has made innovation on the object of Financial Deepening Theory, and it also proposes the opinion that any country or region's financial development has a promoting effect on economic growth. At the same time, this paper does the research on five ethnic autonomous regions analyzing the current situation of banking industry, securities industry,insurance industry, and then get the conclusion of relationship between financial development and economic growth in five ethnic autonomous regions by empirical study.This paper also take five ethnic autonomous regions as a whole to research their finance and economy situation by doing horizontal comparative analysis between five ethnic autonomous regions and Hunan province, Hubei province on central area, Shanghai, Guangdong province on southeast coastal area from the aspects of banking industry, securities industry,insurance industry. After analyzing, this paper gets the gap between five ethnic autonomous regions and central area,southeast coastal area. It's also easy to find out the factors that hinder the economic development of the five ethnic autonomous regions, and then put forward the corresponding improvement measurements.After the above qualitative and quantitative analysis, it can be concluded that, firstly, since the” Grand Western Development Program”, economic growth rate of five ethnic autonomous regions is increasing on a high speed, the average growth rate even surpasses central area and southeast coastal area, but also has very big gap on increasing amount. Secondly, five ethnic autonomous regions' economic growth still rely on banking industry, securities industry and insurance industry share small proportion, and they also make smaller contribution for economic growth. Thirdly, comparing with the central area and southeast coastal area, five ethnic autonomous regions' securities industry and insurance industry are underdeveloped, operation of financial efficiency and the marketization are on low degree, financial system is also imperfect. Fourthly, five ethnic autonomous regions mainly depends on savings and loans to boost the local economic growth among them, the savings have greater impact on economic growth. Fifthly, five ethnic autonomous regions' financial institution structure is single, state-owned banks are still in a monopoly position, private financial institutions are underdeveloped.According to the above analysis results, this paper puts forward the following recommendations: firstly, promote the internet financial innovation model and popularize the Internet financial knowledge to increase the financing channels for enterprises. Secondly, speed up the pace of financial institutions' reformation, break the state-owned banks' monopoly situation and support private financial institutions to participate in the competition in financial markets. Thirdly, Promote the development of capital market by developing a batch of private enterprises that own strong economic strength, good operation, encouraging and supporting eligible enterprises to be listed. Fourthly, promote the development of insurance industry by enhancing the regulation on it and finally realize the harmonious development of insurance industry and economy.