West Region's Financial Efficiency And Economic Growth: Theoretical And Empirical Study

According to the strategy of west development, increasing the west region's total amount of financial resources is not an effective way to narrow the gap between east region and west region. Besides, the approach of increasing total amount of financial resources is bound by the scarcity of financial resources. Thus, it is not sustainable for the west region's development. Under the context of coordinating regional development, improving financial efficiency is a good choice for the development of the west region. According to papers of economic growth, lots of scholars have paid too much attention to the relationship between economic growth and financial volume. However, there is little academic research focus on the relation of economic growth and financial efficiency. Therefore, the study of west region's financial efficiency, the relationship between economic growth and financial efficiency is of practical and theoretical significance.I did factor analysis on different region's financial efficiency in this paper. With the empirical results, I compared the financial efficiency of different regions. In order to further explain the significance of improving west region's financial efficiency, I did regression analysis with the years of time series data (1978-2008) of Gansu province. Regression analysis showed that west region's financial efficiency has played a key role in promoting economic growth. Financially, I analyzed reasons why west region's financial efficiency was unsatisfactory. Based on these reasons, I discussed ideas of improving west region's financial efficiency and promoting west region's economic growth.