Macroeconomic Policy,Equity Nature And Credit Capital Allocation

Along with the economic growth and market innovation ever since the reform and open up,the market structure of China's banking industry has also undergone significant multi-stage transitions.With greater access provided to the market,the banking industry is now in the process of progressive marketization,internationalization and normalization,witnessing the high growth rate maintained for nearly thirty years which has driven China the way towards the second largest economy in the world.As the core component of the financial system and the key servicing institution to satisfy the financing demand of the real economy enterprises,the structural transition of banking industry,as well as the specific mechanism of the impacts it imposes on the take-off of market economy,is well worth thinking over.At the same time,the economic development in China is extremely geographically unbalanced,with the growth level ladder-shaped distributed across the regions from east to west.Correspondingly,the market structure of bank industry diversifies across the regions:it is less concentrated in the eastern coastal areas where the finance industry is more prosperous as an entity and is relatively more concentrated in the Central and the West.The questions:Would the diversity between the banking market structure across the regions further affect regional economic growth?In view of this question,this article will apply the classical models of economic theory to the research of the development in banking market structure and try to make innovations.We set up the random choice model from the perspective of individual agents,seeking for the microeconomic basis on which the monopolistic banking market structure is formed.As well,we explain the leading role large banks should play in the financial innovation process using game theory and analysis the relationship between the concentration of banking industry and its development,along with the regional economic growth from multiple.In the empirical part,we seek for the impacts of the change in banking market structure on regional economic growth based on the empirical provincial data of banking structure and regional growth frow the year 1994 to 2013.To view as whole,the efficiency brought by the over concentration of banking structure would proceed its positive impact and would hinder the regional economic growth,which is more evident in the eastern coastal areas.Simultaneously,with the relative scarcity of financing channels and the limited level of development of other financial institutions,the impact of the large banks on regional economic growth is still notable in the Central and West provinces of China.And from the time dimension,although the degree of concentration in banking market structure is negatively related to the gross domestic product both before and after the marketization reform of interest rate pricing,it has a significant positive impact on the regional economic growth after the reform,featuring the role of large banks in the development of financial market and financial innovation.And under the background of the market mechanism of interest rate pricing,the way to take full advantage of the leading role of large banks in regional financial development,along with forbidding the efficiency loss brought by monopoly,would be a key to enhancing the driving force to economic growth by the financial institutions.