Research On Interaction Effect Of County Economy And County Finance

In recent years,the county economy has entered a stage of rapid development,plays an important role in national economic growth.The county finance as an important force in support of the county economic development,meet the government,enterprises,individuals and otherdifferent financial needs.But in the process of economic growth in the county and county financial development,there have been many uncoordinated phenomena,for example,the level of county financial development lags behind the growth of county economy,the feedback effect of economy to county finance is not obvious,these affect the coordinated development between county economy and county finance.Therefore,how to achieve positive interaction and coordinated development of county economy and county finance is a serious problem which focused of academic and policy circles concern.In order to explore the mechanism and interaction effect of county economy and county finance,this paper reviews and summarizes the findings of many scholars at home and abroad.In theoretical level,this paper systematically analyzes the support mechanism of county finance to county economy and the feedback mechanism of county economy to county finance,which lay the theoretical foundation for the realization of the coordinated development of county economy and county finance.This is a major innovation of this paper.Secondly,from an empirical point of view,this paper using Hebei's county economy as a sample,not only make a comprehensive analysis of current situation,characteristics,existing problems in the development of county economy and county finance,but also through the establishment of Granger Causality Test and Panel Data Models,make an empirical test about the causal relationship and interactive effect between county economy and county finance.Hebei Province,as the second largest province of the county economy,its development characteristics of eastern,central and western county economy are similarto the development of national characteristics of eastern,central and western area.There is certain representation.It has guiding and practical significance for promoting and implementing policies to realize the harmonious development of county economy and county finance.The study shows that Hebei's county economy and county finance did not achieve positive interaction.The support of county finance to county economy is stronger than the feedback effect of county economy to county finance.Secondly,in different regions,the interactive effects and transmission mechanism between county economy and county finance are different.In higher level of economic development area,it exhibits supply-leading and demand-following mode.In medium level of economic development area,the mode of supply-leading is more significant.In the level of economic development of backward area,although exiting two-way causal relationship between county economy and county finance,it mainly rely on the government support and guidance.Therefore,in order to achieve positive interaction and coordinated development of county economy and county finance,we need to build and optimize interaction mechanism and transmission channel between county economy and county finance,improve the county's financial system,implement differentiated support policies,and promote the healthy development of the county economy.