Study On The Impact Of Financial Development Quality On Real Economic Growth In China

Finance is the core competitiveness of a country.Since the reform and opening up,China’s financial industry has developed rapidly and achieved historic accomplishments,but there are still many contradictions and problems which make it difficult to meet the requirements of the high-quality economic development,resulting in structural,functional and regional imbalances in China’s financial system.All these problems restrict the improvement of the development quality of China’s financial system,which are not only the crux of the unbalanced and insufficient development of China’s regional economy,but also affect the high-quality development of the whole economy.On the other hand,most of the current researches fail to bring a complete financial system into the studies,so they are lack of a full understanding about the operating laws of the financial system,and also cannot study the various dynamic mechanisms about how the financial development affects the real economy in-depth and accurately.Then,from the perspective of the financial development quality,can the paper take a relatively complete financial system into the studies,do theoretical analyses and empirical researches on the mechanisms about how the financial development quality affects the real economic growth on the basis of a clear understanding about the operating laws and the evolution characteristics of the financial system,and also establish a coordinated development mechanisms of the financial system and the real economy?In order to answer and solve these questions,based on the financial development theory system,this paper defines the connotation of the financial development quality,constructs the financial development quality evaluation index system from the dimensions of financial scale,financial structure and financial efficiency,measures it accurately,and quantifies its dynamic evolution characteristics comprehensively and systematically.Then this paper constructs the theoretical framework,and theoretically studies and analyzes the mechanisms about how the financial development quality affects the real economic growth.Subsequently,this paper studies the influencing mechanisms about how the financial development quality and its three dimensions affect the real economic growth empirically.Furthermore,the paper studies and analyzes the mechanisms about how the financial development quality affect the real economic growth from the perspectives of the different financial sub-industries and the sector growth rate gap between the financial system and the real economy.Finally,this paper studies and discusses the mechanisms about the coordinated development degrees of the financial development quality and the real economic growth based on the coupling coordination degree model,and puts forward some suggestions on promoting the coordinated development of the financial development quality and the real economic growth in China.To sum up,the paper has the following research conclusions.Firstly,this paper draws conclusions on the theoretical mechanisms about how the financial development quality affects the real economic growth.First of all,when the financial system has a certain scale,the real economic growth is related to the financial structure and the financial efficiency,and the capital conversion efficiency plays a decisive role of all the factors.At the same time,it is reasonable to have a sector growth rate gap between the financial system and the real economy sector,and there is an optimal sectoral growth rate gap threshold(or threshold range).Then,according to the constructed theoretical model,this paper further investigates and analyzes the mechanism about how the financial development quality affects the real economic growth from the dimensions of financial scale,financial structure and financial efficiency.It is found that:(1)The financial scale increases moderately,the financial system can effectively serve and support the real economic growth,and also result in the improvement of the financial development quality.(2)The improvement of the financial structure is conducive to the improvement of the financial development quality and the improvement of the ability on the financial system effectively serving the real economy.Furthermore,the financial market sector that directly provides capital to the real economy is more sensitive to the changes of the financial system structure,and the financial intermediary sector is more sensitive to the scale changes of the real economy sector.(3)The improvement of the financial intermediation efficiency and the capital conversion efficiency all can promote the real economic growth,but the improvement of the financial intermediation efficiency is no longer the effective way to improve the financial efficiency.To effectively improve the financial efficiency and promote the ability on the financial system serving the real economic growth,the most important way is to improve the capital conversion efficiency.Secondly,this paper draws conclusions on the spatial and temporal dynamic evolution characteristics of the financial development quality.First of all,the financial development quality of the whole country and the three major regions has shown significant improvements,and the changing trends have obvious periodic characteristics.Then,the position,shape,distribution width and polarization characteristics of the non-parametric KDE curves in the whole country and in the three major regions show significant differences.Meanwhile,the Gini coefficients all show a clear downward trends in fluctuations,and the decline trends in the eastern and western regions are more obvious.Once more,the variation coefficients of the whole country and the three major regions show a significant downward trend,supporting the σ-convergence hypothesis.In the meantime,the absolute β-convergence and the conditional β-convergence estimated coefficients of the whole country and the three major regions are all significantly negative,supporting the β-convergence mechanism.Finally,China’s financial development quality presents a significantly negative geographic-spatial agglomeration feature,which is relatively stable.Thirdly,this paper draws conclusions on the mechanisms about how the financial development quality affects the real economic growth from the perspective of the whole financial system.First of all,the improvement of the financial development quality is beneficial for the financial system serving and supporting the real economic growth.Then,the adjustment of the financial scale will help the financial system to enhance its ability of serving and supporting the real economic growth and the improvement of financial scale quality will play a more significant role.Once more,the optimization of the financial structure is helpful for enhancing the ability of the financial system serving and supporting the real economic growth.In the meantime,optimizations of the financial internal structure and the financial relative structure both have significant effects.Finally,the improvement of financial efficiency will help the financial system to enhance its ability to serve and support the real economic growth,and the improvement of the capital conversion efficiency has a more significant role.Fourthly,this paper draws conclusions on the mechanisms about how the financial development quality affects the real economic growth from the perspective of the different financial sub-industries.First of all,the improvements of bank structure and development quality,capital market structure and development quality both can effectively promote the real economic growth,but there is a suitable scope.Then,from the regional perspective,the eastern region mainly depends on the improvements of the bank structure and development quality,the capital market structure and the insurance market structure to promote the real economic growth,the central region mainly depends on the improvements of the bank development quality and the capital market development quality to promote the real economic growth,and the western region depends on improving the structures of the bank,the capital market and the insurance market to promote the real economic growth.Finally,after the global financial crisis in2008,the bank sector depends more on optimizing the bank structure to promote the real economic growth,the capital market begins to adjust and optimize its structure to improve its financing capabilities.Fifthly,this paper draws conclusions on the mechanisms about how the financial development quality affects the real economic growth from the perspective of the sector growth rate gap between the finance system and the real economy.The paper finds that there is an optimal sector growth rate gap interval,in which condition the financial development quality reaches the optimal state in terms of scale,structure and efficiency,and can most effectively serve and support the real economic growth.Furthermore,when the sector growth rate gap is too small,the developments of the financial system are limited.At this time,due to the difficulties in achieving an appropriate financial scale,the financial efficiency is reduced,and the ability of the financial system to serve and support the real economic growth cannot be continuously improved.Meanwhile,when the sector growth rate gap is too large,too many investments will flow into the financial system,resulting in excessive expansion of the financial system.Excessive financial development will lead to the acceleration of “the real economy distracts from its intended purpose”,aggravate the imbalance of the different financial sub-industries’ relative structure in the financial system,and ultimately lead to a decrease in financial efficiency,which will weaken the abilities of the financial system serving and supporting the real economic growth.Sixthly,this paper draws conclusions on the coordinated development mechanisms of the financial development quality and the real economic growth.From an overall perspective,the overall degrees of coordinated development(average)between the financial system and the real economy in the whole country and in the three major regions have shown a fluctuating upward trend,and gradually improve from a primary coordinated development type to a well-coordinated development type.From the perspectives of financial scale,financial structure and financial efficiency,the overall degrees of coordinated development(average)between the financial system and the real economic growth in the whole country and in the three major regions all have gradually improved from a primary coordinated development type to a well-coordinated development type as well.However,the coordinated development degrees of the central and western regions begin to exceed that of the eastern region after the year 2009.Accordingly,the paper proposes corresponding countermeasures and suggestions to promote the coordinated development of the financial development quality and the real economic growth from the three dimensions of financial scale,financial structure and financial efficiency.The possible innovations of the paper are:(1)Based on the financial development theoretical system,the paper defines the connotation of the financial development quality,constructs the financial development quality evaluation index system,measures it accurately,and does a more comprehensive and systematic analysis about the temporal and spatial evolution characteristics of China’s financial system.Different from most existing literatures based on a single perspective such as structure or efficiency,this paper makes a more comprehensive study and analysis of the financial system from the three dimensions of financial scale,financial structure and financial efficiency.Including a complete financial system in the research,this paper tries to captures the evolutionary laws and dynamic characteristics of China’s financial development from the quality perspective.The studies in this paper will not only provide theoretical bases and referable experiences for deepening the financial supply-side structural reform and promoting a coordinated quality-enhancing development of China’s financial system in scale,structure and efficiency,but also provide new ideas for promoting the high-quality coordinated development of China’s financial system and the real economic growth.(2)This paper constructs a theoretical framework about how the financial development quality affects the real economic growth,divides capital into productive capital and financial capital,and innovatively divides financial capital into financial intermediary capital stock and financial market capital stock.Furthermore,the paper innovatively defines financial intermediation efficiency and capital conversion efficiency.Then,this paper studies the theoretical mechanisms about how the financial system affects the real economic growth from the three dimensions of financial scale,financial structure and financial efficiency.The researches of this paper provide a relatively solid theoretical foundation for its empirical studies and enrich the financial development theory to some extent.(3)Based on the measurement results and the corresponding theoretical analysis,the paper incorporates a relatively complete financial system in the empirical researches,studies the influencing mechanisms about how the financial development quality and its three dimensions affect the real economic growth from different dimensions.In the meantime,based on the perspectives of the different financial sub-industries and the sector growth rate gap between the finance system and the real economy,this paper also discusses the mechanisms about how the financial development quality and its three dimensions affect the real economic growth from different perspectives.Furthermore,this paper uses the coupling coordination degree model to measure and study the coordination degree of the financial development quality and the real economic growth,and puts forward corresponding countermeasures and suggestions as well.The studies in this paper will not only provide an empirical basis for promoting regional coordinated development in China,but also provide a feasible solution for deepening the financial supply-side structural reform and promoting the high-quality economic development in China.