Empirical Analysis Of Financial Inclusion And Economic Development

China has been laying more emphasis on the development of inclusive finance in recent years.In order to explore ways to utilize inclusive finance to boost economic growth and relieve poverty in poor areas,Lankao county established the first national Pilot Inclusive Finance Reform Zone in 2016.During the two-year experiment,Lankao has achieved an outstanding success,which is to lift its people above poverty line in less than a year.And the "Lankao model" is promoting in Henan Province,As a province which served as a real-life case scenario that using inclusive finance to boost economic development.Therefore,it is vital to discuss the relationship between inclusive finance and economic development in the counties of Henan province.This paper is based on previous research and reestablishes the IFI System that includes 86 counties in Henan Province.This paper first constructs IFI based on economic development and then uses the index as a key explanatory variable.Harnessing the methods of regression analysis and individual fixed effects model,this paper analyzes the relationship between IFI and economic development index and explores the impact of inclusive finance at county level on economic growth.The analysis demonstrates that among the IFI,the number of banks per 10,000 and electronic-bank substitution rate have significant positive effect on economic development and in the meantime,the utilization of deposit have huge negative impact.Meanwhile,The IFI in different counties with different level of urbanization,employment,industrial structure and fiscal expenditure does have an significant differences in relationship with local economic development.In counties with higher level of economic development use the inclusive finance policies to boost the economic conditions should pay attention to the expansion of outstanding of deposits.Compared to the counties with higher level of economic condition,the lower conties because of heavily dependent on fiscal expenditure,the expansion of outstanding of deposits will boost the economic development in this condition.