The Study On Allocation Of Financial Resources In Henan Province

Total lack of supply of financial resources and inefficient allocation of financial resources are the important reasons that hinder the economic development of Henan. Based on those, this paper studies the financial resources, and makes research on allocation of financial resources in Henan, in order to optimize allocation of financial resources in Henan, and to promote economic development of Henan.This paper is written in the line of the theoretical definition, situation analysis, empirical testing, and suggestions. First, this paper defines the basic concepts of financial resources, allocation of financial resources and the effectiveness. Second, it analyzes the Pareto optimal conditions of allocation of financial resources and the mechanism of economic growth promoted by optimal allocation of financial resources. Then, by using comparative analysis, multivariate co-integration test and Granger causality test, this paper analyzes the status of allocation of financial resources in Henan Province and the influence to economic development by allocation of financial resources in Henan. Finally, based on the status and empirical test results, this paper proposes suggestions to optimize the allocation of financial resources in Henan.Theoretical analysis shows that: the financial resources have duality; effective allocation of financial resources includes not only the coordinated operation of the financial system itself, but also the coordination between financial and economic development; there exists many practical constraints for allocation of financial resources, therefore no Pareto optimal state exists, but only a low efficiency or a high efficiency of allocation of financial resources exist; optimal allocation of financial resources promotes economic growth in three ways.Empirical tests show that: the total lack of financial resources exists in Henan Province, as well as the low level of economic status does; credit structure is unreasonable; allocation of financial resources is with low efficiency; the whole structure of finance is irrational, stock and insurance market are both with low investment rates; social credit environment drops relatively behind; financial openness is low; factors including the total financial resources, the efficiency of financial intermediation, financial markets level and financial openness have little effect on promoting economic growth in Henan and on optimizing the dual economic structure. Through the whole analysis, this paper believes optimizing the allocation of financial resources in Henan Province by developing the financial industry itself and strengthening financial support to the "three rural".