An Empirical Research On The Relationship Between Banking Development And Economic Growth Of Wuhan

With the development of Chinese banking reform, people begin to pay more attention to the relationship between banking development and economic growth. To explore this relationship, the evolution process of the theory of financial development is summarized, and the theory of financial deepening and financial repression phenomena is introduced, and then Wuhan is studied empirically from the city level in this thesis. At first this study explain the economic development and banking development of Wuhan city, then by choosing Wuhan's per capita GDP annual growth rate as the indicator of the speed of economic growth, banking concentration of Wuhan as the indicator of the banking structure, the proportion of the financial institutions loans outstanding at the end of the year to GDP, this thesis establishes the vector auto regressive model, and uses unit root test, Johansen co-integration analysis, Granger test, impulse response function and variance decomposition to date from 1984 to 2013 of Wuhan. Through using these methods above, this paper makes an econometric analysis to explore the relationship among economic growth, banking structure, and banking scale of Wuhan. After the econometric analysis, this thesis finds that the Granger reason of Wuhan's per capita GDP annual growth rate is the banking concentration of Wuhan. The reduction of banking concentration contributes to explain the improvement of per capita GDP annual growth rate in Wuhan. At the same time, this study finds that the economic growth of Wuhan is dominantly affected by itself, banking structure comes second, and the weakest effective factor is the financial deepening degree. By making the econometric analysis to explore the relationship between banking development and economic growth of Wuhan, it is helpful to understand the relationship between economic growth and banking development in Wuhan,also it is conducive to the government taking more reasonable and effective measures in promoting the economic growth and banking development of Wuhan.At the end of the thesis,the results of empirical analysis are discussed and some suggestions based on the results are made for the banking development in Wuhan.