Researched On Relationship Between Financial Structure And Economic Growth In Cambodia

The relationship between financial structure and economic growth has become an important major for financial theory and empirical analysis research.One possible reason that the optimization of financial structure is an effective method to promote macroeconomic growth is that it could influence capital allocation of social production sector and others.It could improve scientific and technological progress,which promotes optimization of industrial structure.Furthermore,optimizating improvement of industrial structure that could increase social production rate and total amount of social investment,increase social economic growth,which changes financial structure and financial volume.Because of upgrading the optimization of industrial structure,it then creates some automatic changes to the new financial institution,financial products,mechanism of financial trade,and the demands of financial market.Together with the new financial features,it improves internal financial system and new divisions of financial function,which produces a new financial structure.Accordingly,the rapid development of world financial market and economic condition,are the result of significant improvment financial structure and economic growth.Hence,many economic writers have researched and analyzed deeply between theory and practice.In regarding to theory analysis of financial structure and economic development,Financial Development Theory considered on financial system as an exogenous variable of economic development and industrial changes.Consequently,there was an investigation of the perspective of relationship between development of financial system and economic growth.Then some academic researchers have incorporated financial system into the model of social macroeconomic growth,as an endogenous variable.According to this research about the connection of financial system and macroeconomic growth,it has basically divided two above theories which researchers have also used empirical methods to verify the correctness of these theories.Cambodia is one of the ASEAN members and also a developing country,its economic and financial development is still in backward relatively.However,recently economic development in Cambodia has accelerated significantly in particular financial structure.It also has benefited government in financial reforms.As the result of that,Cambodia financial structure start focus on Banking Sector and Microfinance Institutes,Financial Market and Insurance.But,from a different and wider perspective,by considering the current level of economic growth in Cambodia,the development of financial market is just in a support link with economic growth,which is a fundamental step toward economic growth in the future.Yet,whether financial structure in Cambodia is reasonable aspect as financial support in purpose of economic growth needs or not,all these issues require substantial experimental methodology to be clarified.This thesis will begine a research and analysis of the relationship between Cambodia's financial structure and economic growth.And this research will be written base on 4 steps,which are:the theoretical analysis-the status quo-the empirical test-and the logical framework of policy recommendations.First Chaper introduces background and reseach methods of the thesis.Second,within theoretical analysis of the relationship between financial structure and economic growth,firstly from the theoretical model of financial economic function,financial development and economic growth explore the theoretical analysis.Secondly is from the concept and classification of financial structure based on bank-based,market-based of financial and Economic structure,the co-reflection between economic structure and economic growth..Thirdly,financial structure are measured from mechanism activities to industrial structure,and from optimization of industrial structure to mechanism activities are explored in upgrading of financial and industrial structure by examining methodology of technical and science to clarify.Third chapter,serveral investigations were conducted on financial development and economic growth in Cambodia.To start with there was an investigation on Cambodia economic growth including economic growth condition,the comparison between Cambodia economic growth and world's economic outlook,three main industrial sectors and inflation,financial development,trade,and balance payment.Moreover,another investigation examines the situation of financial development in Cambodia by studying on its banking sector,securities industry and the insurance industry.The fourth chapter illustrates the relationship between financial structure and industrial structure in Cambodia based on a typical correlation analysis and input-output analysis combine with Cambodia's industrial development and financial structure data.According to the empirical results,it is found that microfinance structure is more favorable on agriculture with services sectors.To sum up,comparison on asset and deposit structure of commercial banks and specialized banks has an important effect on structure of three industries in Cambodia,from the asset structure of foreign banks and domestic banks to three industrial structures are limited role.Fifth,considering the empirical analysis of the relationship between financial structure and economic growth in Cambodia,the correlation between Cambodia's financial structure and economic growth is evaluated by two studies such as principal component analysis and regression analysis of time series data in combination with Cambodia's economic and financial data.These analysis were found many results that:financial structure in Cambodia has a more significant impact on economic variables for GDP.While Cambodia's financial structure plays an important role in economic growth in many ways.It was concluded that,the impact of Cambodia's financial structure on economic growth is more evident,and the impact of economic activities on the financial structure is not so obvious.After surveyed on theory and empirical analysis with practices,last chapter mentions recommendation of the adjustment on Financial Structure and Economic growth in Cambodia.Firstly,objectives of financial structure in Cambodia and basic principle need to be studied thouroughly.Secondly,put forward ways optimization and mode selection adjustment of Cambodia financial structure,including selection of development mode,force mode and open to the world.Third,this chapter suggests and optimizes specific recommendations of Cambodia financial structure which are overall planning,the formation of a systematic development plan,strengthen financial infrastructure construction,optimize the structure of financial institutions,constructing financial market structure,and other guarantee measurements.