Empirical Study On The Support Of Banking Financial Institutions To The County Economic Growth

In the situation of modern market economy, finance has become the center of economy, determining the speed and efficiency of the economical growth. When the function of financial factors is restrained, the economic growth will inevitably suffer from the restraint. Rural finance is the regulator of surplus and shortage of funds, which plays a key role to raise the funds, guide the flow of them, optimize the allocation of resources and adjust the social total demand in the modern rural economical development. The rural economical growth in transition under the condition f market economy demands relatively high level of capital investment in both quantity and quality. Thereby, the market collocation of financial capital is crucial to guarantee its scientific use and rational circulation. But at this stage there is a huge difference between urban and rural financial development, furthermore rural economy is still facing severe capital shortage, which is bound to create a serious constraint on the coordinated sustainable economical development in rural areas. Rural finance takes an irreplaceable responsibility to improve rural economical growth, and should become to be the strategic way to promote the rapid growth of Chinese rural economy.In this paper, the internal logic and actual basis of financial support in the process of Chinese rural economical growth in transition are discussed, with the basic theories of Marxist economic theory as a guide and the rational factors in the theories of western development economy and financial economy as reference. By means of analysis framework of the political economics from the relationship between government and market, quantitative analysis, the survey interviews as well as case studies, we want to inspect the actual functions that the rural financial institutions play and find out the problems in the rural financial system, explore an efficient way of the rural financial reform to push the rural economy to grow quickly and well..This paper consists of four parts mainly:The first part is the introduction, which mainly describes the background and significance of topics, the structure and research methods this paper takes.The second part is to study the finance development and economic growth from the theoretical angle. First, based on the financial function, it analyzes the finance development's promotion effect on economic growth. The financial department functions such as the risk management, information disclosure, corporate governance, savings mobilization and facilitate transactions can reduce the cost of transactions and information, and promote capital accumulation and technology innovation, so that it can accelerate the economic growth. Second, based on the fusion of rural finance and rural economy, it demonstrates that the rural finance is in the core position of rural economic growth. What's more, the rural finance can guide and help us distribute the rural resources, and completely determines the degree of development of rural commodity economy, and effect the running of our whole economy.The third part is the empirical analysis about the town of Lishu in Jilin Province. Taking the per capita GDP growth rate as the explained variable, and SOFIR, TFIR and RFIR as the explaining variables, through the regression analysis of relations between financial development and economic growth about the samples in 2000-2005, i find out a significant correlation between financial development and economic growth in rural areas, which is a negative correlation. In other words, the low level of financial development in rural areas inhibits the growth of economy. In order to get the high-quality financial development and sustained economic growth, it is necessary to explore the marketization road of rural finance further.The forth part is to sum up the problems, and then make some recommendations for the rural economical and financial development. In the previous parts, I have discussed the close relation between financial development and economic growth in theory, and explained suitable financial system can promote economic growth, but the relation is not only to promote interaction. According to the financial inhibit theory of MacKinnon, when the financial development is inhibited, it will be a constraint on economic growth, which is consistent with the conclusion of the empirical analysis in the third chapter. Therefore, Construction of a sound financial system can effectively mobilize social savings and promote investment, which could push the growth of rural economy well. The virtuous circle between rural economical growth and financial development is very important for each other.