The Relationship Between Financial Development And Economic Growth In Poverty-stricken Areas Of Yunnan

To solve the problem of regional overall poverty is an important task of our country.Studies had shown that financial services can maximize the allocation of capital and resources to the greatest value,and are essential to promoting economic growth.Economic growth is also a necessary condition for reducing poverty.Therefore,the relationship between financial development and economic growth has become a research hotspots in recent years.Yunnan Province has the characteristics of frontier,ethnic,poverty,and mountainous areas.As of 2014,there are 73 national key impoverished counties,is the largest number of poverty-stricken counties across the country.The poverty alleviation work in Yunnan is important for the nation's poverty reduction goals.In addition,the existing literature only studies the structural causality or dependencies between financial development and economic growth,the research on their interaction is not comprehensive enough.Based on the above background,according to the existing theoretical research and empirical analysis both at home and abroad,based on the panel data of 69 national poverty-stricken counties in Yunnan Province from 2001 to 2015,this paper establishes systematic GMM model and panel VAR model to study the poverty the structural causality and dynamic dependence of financial development and economic growth.This paper trying to answer the following questions:Dose financial development promote economic growth in poor areas? Is there a nonlinear relationship between financial development and economic growth? What is the dependencies between financial development and economic growth?The empirical analysis of structural causality based on economic growth theory is as follows:The financial development in poverty-stricken areas will hinder economic growth.The impact of financial scale and financial efficiency on economic growth is characterized by U-type.After breaking the threshold,it will promote economic growth,while financial service coverage and economic growth are U-type relationship;county government expenditure and the distance from the central city hinders economic development.The empirical analysis of the dynamic dependencies is as follows:Financial development has a lasting drag effect on economic growth,but with the economic development,the effect decay gradually;Economic growth has a temporary impediment to financial development,but it can promote financial development after several lags;financial efficiency and financial accessibility are the Granger cause of economic,but economic growth is only the Granger cause of financial scale;financial development's explain ability of economic growth changes is weak,economic growth's explain ability of financial development changes is also weak.Both of the system GMM and the panel VAR shows that financial development hinders economic growth in the short term,but financial development promotes economic growth in the long-term.Financial development in poverty-stricken counties can be modestly ahead of economic growth,so financial poverty alleviation is meaningful.However,the economic development in poor counties has not yet reached a point of benign interaction between them,only depend poverty alleviation can hardly play a fundamental role.In order to play the positive role of financial poverty alleviation,the policy must strengthen the combination of financial with local industry and economic development.