The Research On The Effect Of Folk Finance To Promote Economic Growth In Shanxi Province

The GDP of China has been growing with an amazing rapid speed.However,the financial markets dominated by formal financial system didn't achieve the synchronous growth with the economic development.This situation caused some contradictions between the supply and demand of funds on the market.The emergence of folk finance to ease these contradictions.As an effective complement to the formal finance,folk finance is helpful for promoting development of folk economy and increasing the efficiency of funds.In order to use this thrust better,our government and finance regulatory authorities changed their attitude on folk finance from ban to support,and also take it as a policy target.The province of Zhejiang,Shanxi and Inner Mongolia are the most active areas of folk finance in China.Shanxi province has experienced "golden ten years of coal",and accumulated a large scale of folk capital.Recent years,Shanxi is in the process of industrial restructuring,the government put forward the policy of activating folk capital.Financial repression is the reasons of folk finance's production.So this article analyzed the causes of folk finance on the basis of financial repression and financial deepening theory.Then we studied the present situation and features of folk finance in Shanxi province.We using the theoretical analysis,theta value estimation and cointegration analysis method.In this article,we calculated the folk finance rough in Shanxi province from 1995to 2015.And made an empirical analysis by using the measured results.The main conclusions are as follows:The first,folk finance activities in Shanxi is active.From 1994 to 2015,the folk finance in Shanxi become an important part of its economy.It has large scale and much of it invest in the real economy.The second,folk finance in Shanxi has a promoting effect on local economy development.This effect mainly includes investment effect,income effect,supplementary effect and innovation effect.It promotes folk economy,increasing the income of residents and optimizing the allocation of resources,supplement the formal financial function.The third,empirical results show that economy development in Shanxi was impacted by fixed assets investment,labor and folk finance.The folk finance of Shanxi has a significant impact on economic growth.The fourth,the expansion of folk finance in Shanxi is a granger cause of its economic growth,but conversely not.