Research On The Impact Of Financial Density On County Economic Growth

County economy is an important part of China's national economy.Furthermore,it is of great significance for regional economy to realize a steady and relatively fast county economy.Besides,finance is the "blood" of modern economy.County-level finance development serves as a means to achieve regional economic growth,as well as a responsibility to promote economic growth.Since the 21 st century,as large state-owned commercial banks merged and withdrawn in rural areas,the number of financial outlets within the county has continued to decline,resulting in backward financial infrastructure and more difficulties for residents to obtain financial services.In recent years,however,village and town banks,rural commercial banks and the Postal Savings Bank have deployed a large number of county-level outlets.Moreover,county-level financial infrastructure has been continuously improved,which has strongly supported county-level economic development.Financial density,as an indicator to measure the level of financial development,is a means to measure financial infrastructure.Furthermore,studying the relationship between financial density and economic growth is conducive to the rational distribution of financial resources,and makes finance further promote economic growth.This article mainly used analysis methods including the literature analysis method,comparative analysis method and empirical analysis method.And based on the analysis of relevant literature at home and abroad,this article sorted out the research state to find out the achievements and deficiencies of the existing research.This article innovated the original financial density index system as follows:financial density is divided into following parts: geographic financial density,population financial density,economic financial density,and administrative financial density,according to four dimensions: geographic area,population,economicdevelopment,and administrative area.In view of the practical significance,however,the study only included geographic financial density,population financial density,economic financial density as research objects.The empirical part used the data of 63county-level administrative units in Hubei Province from 2011 to 2017,to establish respectively a random effect model and a fixed effect model to conduct an empirical study of the three-dimensional county financial density and county economic growth.The study found that,among the selected county-level administrative units in Hubei,the county economic growth is positively correlated with the population financial density of the county,and is negatively correlated with the financial density of the county economy.The correlation between the geographical financial density of the county and the economic growth of the county show an inverted "U" curve.The thesis research showed that financial density makes great contributions to economic growth and is the driving force for economic growth.Practically,the current financial density level in the county area of Hubei Province is relatively low,and the financial infrastructure within this area remains to be improved as well.Therefore,measures to change the status quo are as follows:To began with,we must accelerate the construction of county financial infrastructure,deepen the reform of the financial supply side,increase the proportion of insurance,securities and other financial institutions in county finance,and improve the financial service system.Besides,apart from continuously supporting village and township banks as well as rural commercial banks in the layout of county-level outlets,large commercial banks should also be guided to return to county-level finance.Thirdly,it is of great importance to establish a conducive county financial ecological environment,to strengthen the construction of social credit system and credit reporting system,and to improve the recovery mechanism for breach of contract.Finally,the layout of financial outlets should be kept reasonably.It is not to pursue the number of financial institutions blindly,but to improve the operational efficiency of financial institutions.Furthermore,the relationship,between economic growth and population financial density,economic financial density,geographic financial density respectively,should be comprehensively referred to,so that to make sure that financial resources can meet the needs of financial services exactly.