Financial Development And Economic Growth

Financial Development and Economic Growth:Research on the Empirical Study of Jilin ProvinceSince China's accession to the World Trade Organization, China has gained more and more attention, Especially in recent years, China's economic growth rate is more alarming. At the end of 2009, China's GDP reached 4.91 trillion U.S. dollars,however, it still lower than the Japanese GDP $ 5.07 trillion. But China's economic growth rate has remained at a high level, Especially after the U.S. subprime mortgage crisis in 2008 caused the international financial turmoil, China's economic growth rate remains at 8% level . Since then, the world paid more attention to China, China's development should not be overlooked, Some economists even predict: China's GDP will surpass Japan in the near future.But at the same times,we should see clearly that China's per capita GDP is only $ 3,678 in 2009, Resulting in the level of China's economic development still can not reach the level of developed countries. In the case of complex domestic and international trends,China's economy still remain good in 2010, The whole year reached a total GDP of 5.879 trillion U.S. dollars, ranking second among the world's GDP.But at the same times, China's per capita GDP is still in a low speed ranking among the world's hundred or so.In the end of the year,China's per capita GDP only reach one-tenth of Japan's GDP per capita, far behind the world average,so the development of China's economic growth is becoming the most urgent task.. In 1979, Deng Xiaoping led China into the trip of China's reform and opening up, China's economy has made significant breakthroughs, Especially since the stock market established in the nineties, China's economic growth is more rapidly. In September of 2003, the State Council expressed concern about the old industrial bases in Northeast China, Since then, the economic development of Northeast gradually put on the agenda, and Jilin Province in northeast China as an important province,Jilin's economic growth should not be ignored. Therefore, this study focused on the relationship between financial development and economic growth of Jilin Province, focusing on the stock market in Jilin Province, the bond market and long-term loan market, and find out which part of these would developed the economic growth of Jilin Province, thus to improve the hinder part of the economic development of Jilin Province.In the purpose of study the relationship between financial development and economic growth of Jilin Province, thus given the topic and backgroud of this paper. The chapter is mainly to describe the purpose and meaning of this papers, then discribe the structure of this paper briefly.The secong chapter of this papers focused on the literature review which is about the relationship between financial development and economic growth .First,to sum up the theory of financial development abroad briefly. Accrossing it, we will divide the foreign literature review into three stages.First summarize the financial structure,financial deepening and financial repression before 1980s. Second, to sum up the financial development theory during the 1980s to the 21st century ,during this stage ,the representatives is the endogenous growth theory. Finally, to sum up the theories of financial development after the 21st century, a new system is on behalf of the theory of financial development dueing this stage . The theory include many factors which affect the economic growth ,such as legal and other factors .Then, this chapter summarizes some of the domestic scholars'literature whose foucs on the relationship between the financial development and the economic growth.Chapter III of this papers is mainly to describe the significance of this papers.In this Chapter, We will first to describe the economic status of Jilin, Heilongjiang and Liaoning Province simplely. Here we mainly use the per capita GDP to compare the economic development during the provinces of Jilin, Heilongjiang and Liaoning. And then selected nine indicators to analyze the status of financial development and economic growth during the provinces of Jilin, Heilongjiang and Liaoning.The nine indicators are: GDP, the investment on the fixed asset, financial depth, rate of securitization, the fund-raising capacity of capital markets in Jilin Province,the loan size of financial institutions, long-term loans market, account number and amount of bond trading. Finally, the chapter will sum up the current situation between financial development and economic growth simplely.Chapter IV is the research focus of this study,It is mainly to make empirical relationship between the financial development and economic growth, during this process, we mainly used the data of the relationship between development and economic growth in Jilin Province during the time 1993 to 2009. AK model and CD function is used to analysis of these data.thus to understanding the relationship between the financial development and economic growth. During the process of empirical testing, we mainly used three indicators :the amount of equity financing, the total long-term loan market and the institutional factors to test the status of the financial development and economic growth.Chapter Five is the conclusion and policy recommendations of this papers, which summarizes the financial development problems, these problems mainly include: First, the small number of listed companies and the weak operating; Second, the structure of financial development is still irrational; Third, there are certain problem of the financial development mechanism; Fourth, the financial development talent of Jilin province is still shortage, the province's people's awareness to develop financial is not strong; Fifth, the role of finance were not taken seriously during the process of economic development in Jilin Province, etc. According to these questions,the policy recommendations to development the financial of Jilin Province is given, to promote financial development of Jilin Province ,thus it can better serve and make due contribution to economic growth, major policy proposals are: First of all, the size of listed companies should further expand and improve; Second, to develop GEM, for more paving the way for the development of SME financing; Third, to develop private equity investment; Fourth,to integrate the existing financial platform in Jilin Province; Fifth, the Government policy support (limited partnership);Sixth, to establish the sound and perfect equity trading center;Seventh, to support innovative development of the securities and futures companies to improve their core competitiveness; Eighth, to improve the social credit environment; Ninth, to promote the development of regional financial, the government should pay much attention to support the policy banks.