Regional Banking Industry Structure And Economic Growth

It always is the focus to dispute about the relation between financial development,financial structure and economic growth, and it is quite important to analyze the relation between financial industry structure and economic growth. This paper has made great emphasize on the relation between banking industry structure and economic growth and the difference of the relation among different regions in China.This paper summarizes the research results about the theory of financial development and the theory of regional finance, points out which mostly particular emphasize on studying the uses what financial development contribute to economic growth.In this paper, we use china's province level panel data to analyze how the banking industry structure influences the economic growth. It's found that the differences between banking industry structure and economic structure of different province will statistically predict the difference of provinces'economic growth. In the regions where big enterprises and state-owned enterprises have leading place, the higher of the concentration of regional banking industry structure, the larger the promotion to regional economic growth; while in the regions where small enterprises and privately owned enterprises have leading place, the higher of the concentration of regional banking industry structure, the larger the obstacle to regional economic growth. So we find that it will promote the regional economic growth if bank industry structure matches economic structure.So we should reform bank industry structure further according to specific conditions of regional economic structure, strengthening supervision, protecting medium and small investors interest, and so on to improve the efficiency of financial system especially banking system in order to promote long-term economic growth healthily and stability.