Research On Causality And Exogeneity Of China's Development Of Economy Telecommunication And Finance-

The causal relationship between development of telecommunication,finance and economy has vital importance in policy,especiallly for developing countries.And it has extreme significance for the formulation of national policy.This paper adopts the advanced panel cointegration test,panel data causality test and panel data exogenous test,using panel unit root LLC test,IPS test,Fisher test,and panel cointegration Kao test,Pedroni test,Johansen test,Granger causality test,the Lagrange multiplier(LM)test to set up vector error correction model(VECM),taking advantages of the impulse response functions and variance decomposition to analyze the relationship among the GDP of various provinces and cities,total quantity of telecom business and loan balances.It is concluded that there exists a long-term equilibrium relationship(cointegration relationship)among three variables,and they constitute an endogenous system without exogeneity.The telecom development and financial development can together Granger-cause GDP,and GDP and financial development work can together Granger-cause telecom development,and GDP and telecom development can together Granger-cause financial development.The development of financial industry is the most important part of maintaining the long-term equilibrium relationship between financial development,economic growth and telecommunication development.In addition,this paper also concludes the exogenous variables would shock GDP in the short term,making GDP rise,making telecom business show a trend of increase firstly,decrease secondly and increase lastly,and making financial business decrease.The shock of GDP would affect all of the variables more than the other variables.