| Along with the development and expansion of China’s financial market in the policy of reform and opening-up,China’s financial industry has made important contributions in two aspects,which are optimizing the allocation of resources and improving the efficiency of resource operation.Under the backgrounds that the world’s economic growth generally slows down and the financial volatility enhances,China’s financial industry has expanded in the scales and patterns in recent years.The problems of our financial industry are also increasing more at the same time,such as the shadow banking,the fluctuations of stock market and so on.These events cause people’s concerns to the financial risk and the sustainability of economic growth.The relationship between financial development and economic growth has become a hot topic again.Throughout the results of the previous research,this paper will research the relationship between China’s financial development and economic growth again from the nonlinear perspective.First we briefly introduce the problem of our research and give a brief description.Then we collate and summarize the relevant literature both home and abroad.And we theoretically describe the relationship between financial development and economic growth in detail.Last we statistically describe the status of China’s financial development and economic growth and fully reveal the status of China’s economy.Second we use Cobb-Douglas production function to construct the econometric model by adding the variables of financial development and further introduce Hansen’s threshold regression model.Then we get our econometric threshold model.Because income can measure the operating status of the external economic environment and the domestic researches in this area are still relatively few,so we select income growth rate as the threshold variable.The sample space is China’s macroeconomic datas from the first quarter of 2000 to the fourth quarter of 2014.Finally the threshold effect between China’s financial development and economic growth are estimated.The result of empirical analysis shows that the nonlinear relationship between China’s financial development and economic growth has significant income threshold effect.Then the threshold value is estimated.According to the results,the large sample space will be divided into two sub-samples and we estimate the parameters of two sub samples.The final results show that the bank industry has an inhibitory effect to economic growth and the security industry has a positive effect to economic growth.Although the insurance industry has a positive effect to economic growth,the result is not statistically significant.The threshold effect of the model shows that,if the growth rate of the per capita disposable income increases,then the inhibitory effect of the bank sector will be weaken and the positive effect of the security sector will be enhanced.The significance of this paper is that providing the corresponding policy basis and recommendations for maintaining the balance and sustainable development between financial development and economic growth,by revealing the relationship between China’s financial development and economic growth. |
