An Empirical Study On Financial Structure And Economic Growth

Economic development must rely on the development of finance.Different economic structures have different characteristics of industrial structure and risk.And different characteristics of industrial structure and risk have different ways to financing.Different financial structures have different comparative advantages in financing forms.So there is a question that whether an optimal financial structure which is the most suitable for economic development exists,and whether the financial structure will be dynamic with the development of the economy?This paper analyze the relationship between financial structure and economic growth bases on the prospective of structural matching.Through the theoretical analysis of new structural economics,it shows that the higher the level of industrial structure of a country or region,the more likely it stands at the forefront of the world.And the risk characteristic of this country or region will be more likely to be high risk and high return.Under this condition,financial market dominated financial structure can promote economic growth.And the converse is also true.This paper collects data from 52 countries or regions to do international experience analysis and finds out the consistency between experience and theory.This paper also uses the financial data in China to do analysis.It finds that although China’s financial structure is still dominated by banks,it shows the trend towards financial market dominated structure with the improvement of the market scale and financial mechanism.There are obvious reginal differences in financial structures in China and economy in eastern region is stronger than economy in western region.So its development trend of financial structure is almost the same as that of the whole country.But western region should increase the size of banks because of the characteristics of industrial structure and risk.Financial structure dominated by banks will be better for the economy development in western region.At last,this paper proposes three types of suggestions for the improvement of financial structure.The three perspectives are promoting the upgrading of industrial structure and optimizing the overall financial structure,speeding up banking reform and promoting the development of non-bank financial institutions,deepening the reform of financial market and improving the financial supervision mechanism.It provides suggestions for the policy practice of the economic structure transformation,promoting the steady growth under the "new normal" economy in China.