Empirical Analysis Of The Impact Of Financial Development On Economic Growth In Vietnam

In recent years,the relationship between financial development and economic growth has become increasingly concerned by the economic community.At present,there are many studies on financial development and economic growth abroad.Most economists believe that there is a positive correlation between financial development and economic growth,that is,financial development can promote economic growth.Compared with foreign countries,Vietnam's related research is lacking.In view of this,in-depth study of the relationship between financial development and economic growth in Vietnam to understand the economic development of Vietnam have some reference value.Based on the 2 existing methods from homeland and abroad including theoretical research and empirical study.Using the data of Vietnam in 1995-2014,this thesis has selected proper variables of financial development and economic growth,mainly researched the relationships of economic growth to the financial deepening degree,financial development scale,bank development depth,insurance development degree.The Vector Autoregressive Model(VAR)has been attached to empirical study method.Firstly,make johansen cointegrated relationship test on variables of financial development and economic increase.Secondly,estimate the parameters of variables basing on the model of vector error.Thirdly,do granger causality test.And finally,progress dynamic effect analysis with impulse response function and variance decomposition.The conclusions are arrived as following:1.From the points of the Grainger causality test,financial development and economic growth between the “supply guidance” relationship.Financial development has a positive effect on economic growth,but economic growth cannot drive financial development.This suggests that the expansion of assets in Vietnam's financial institutions is more efficient in financial resource allocation,thus contributing to the economic growth.2.Dynamic impulse response analysis results show that financial deepening and insurance depth in the short term will inhibit economic growth,in the long run canpromote economic growth.The finnancial interrelations ratio has a positive impact on economic growth,but this effect is gradually weakening in the long run.There is a negative impact of Bank credit and economic growth in the long term,the reason for this situation is due to the investment funds mainly from credit.The distribution of credit unreasonable caused by non-performing loans phenomenon,this phenomenon lasted for a long time,thus affecting the economy increase.3.From the contribution analysis,the contribution rate of financial deepening degree to economic growth reaches 34.34% mostly,bank development depth,financial development scale is second,and the contribution rate of insurance development degree is lesser.In recent years,the Vietnamese government implemented monetary policy on various types of loans to introduce preferential policies,adjust interest rates,rational allocation of resources,thereby promoting economic growth.The role of the insurance development on the economy is limited,while vigorously developing the insurance market at the same time,to make the market standardization,to avoid large financial risks affect economic growth.Finally,according to the conclusions drawn from the research,from the economic level,management level,the system level to promote the development of Vietnam's financial and economic growth to promote relevant policy recommendations.