Research On The Contribution To Economic Growth Of Financial Development In Beijing

The theory of economic growth is the eternal subject of economic research, and the relationship between financial development and economic growth, especially the rational measurement of the contribution to economic growth of financial development has become an important subject in this field. Theoretical and empirical studies indicate that finance has no longer been considered as a factor that passively complied with the economic growth, it is becoming a motive force of the economic growth. It has gradually reached an agreement in the theory research that the development of finance is more and more strongly positively related with the economic growth. Financial development has many effects on the economic growth which can be included as following: 1. Promote the economy directly as an important sector of the tertiary industry; 2. Promote to gather the capital (including increase social savings rate and improve the effective transformation from savings to investment); 3. Increase the employment. 4 Improve the productivity and the resource allocation efficiency.In Beijing, its economic development took a speed of over 10% every year since 1996. The economic growth can be explained to a comprehensive effect of varied factors, and this paper focused on the contribution of financial industry to economic growth of Beijing. In this paper, depended on financial development theory and related empirical studies, we define and measure the contribution of finance in direct and indirect aspects. And with the data of Beijing as sample, we research the contribution of financial development to economic growth, and found that the development of financial industry in Beijing is work well for the high speed economic growth.This paper is organized into 5 parts: Part I explains the background and significance of this paper, explains the methods of this research. Part II analyses the factors which affect the economic growth, especially the financial factor's function and contribution. The financial contribution is defined into direct and indirect aspects. Part III is a summary for the development of Beijing's economy and financial industry. Compared financial interrelations ratio, financial assets, financial structure and economic growth, industry structure, the conclusion can be initially drawn as the development of financial industry in Beijing was accelerating the economic growth, but some aspects of the financial structure were not good; the economic growth is well and the industry structure was optimizing. Part IV is the empirical studies of the contribution to economic growth of financial industry. Based on the data of financial development in Beijing about recent ten years, I analyze the contribution of finance from direct and indirect arrangement comparing with Shanghai. The conclusion is the direct contribution is very notability and the indirect contribution has to be improved. Part V recommends feasible suggestions according to current conditions of economic and financial development in Beijing.