The Empirical Analysis On The Relationship Between The Development Of State-owned Banks And Economic Growth

Finance is the core of economy. Financial development has a great important function to the capital accumulation and economic growth. A well-behaved financial market will help savings and transform savings to investment, which will promote capital accumulation, technological progress and long-term economic growth. With regard to the study between finance and economic growth's relationship, foreign research has grown into a mature and complete theoretical system.Banks, especially the state-owned banks have been the main body of China's financial system; they occupy a pivotal position in the entire economy and society, the scale of bank credit affects the whole society's capital formation directly. This article focuses on the relationship between the development of the state-owned banking and economic growth since the reform of state-owned commercial banks from 1997.It is a pity to find that it presents a negative relationship between the development of the state-owned banking and economic growth. With the further analysis we find that the root of this negative relationship lies in the reform of state-owned banks are not complete; although the state-owned banks achieve a breakthrough in technique index, its level of corporate management and competition does not achieve a real improvement.The structure of this article is divided into six parts: the first part is introduction, which introduces the background and significance of the topic and mainly introduce the documents relate to the research questions in the paper; the second part focuses on the function of banks and its promotion mechanism to the economic growth; the third section describes the development process of state-owned banks and focusing on analysis the development status of state-owned banks; the fourth part is empirical studies which choose four technical indicators and other control variables of the 20state-owned banks to study the relationship between them and economic growth; the fifth part is the comment and suggestion of the state-owned banks and analysis the deficiency in the reform of the state-owned banks and then give recommendations to the further reform of the state-owned banks. The sixth part is the summary of the paper.