The Development Of Financial Intermediation And Total Factor Productivity Effect

Since the US Subprime Mortgage Crisis broke out in 2008, the global economy and finance almost both caught in this crisis. Volatility of financial assets has caused further fluctuations in the real economy. Because of this world-wide crisis, the economy of almost every Country in the world is subject to varying degrees of impact. The impact of the level of modern financial development on the level of modern economic development become the focus of world attention. The financial marker has problems, it will trigger a series of economic problems, and ultimately affect the real economy. Financial resources have become an important strategy resources, so does our country. Although China has strict regulations on finance and its derivatives, our economy is greatly influenced in this financial crisis. Quarter GDP growth-rate had a rapid decline since 2008, economic growth in the various provinces of China are subject to varying degrees. So, study the relationship between finance and economic growth become very important.In this paper, when we study the relationship between finance and economic growth, we will choose the development of financial intermediation and the effect of total factor productivity as a starting point, then study whether the development of financial intermediation would affect the economic growth. We choose the scale, efficiency, deepen, and structure of financial intermediation as four indexes. Then, use the country and sub-provincial total factor productivity from 1991 to 2009 to make regression analysis and panel cointegration separately by time dimension and cross section dimensions of space. In this paper, we will use the DEA-Malmquist index method which is more advanced to calculate the total factor productivity and re-calculate the total factor productivity of the country and the thirty provinces.After the empirical analysis of time series analysis and panel analysis, we get the following conclusion:First, when use the time dimension to analysis, the development of financial intermediary has a better long-term, stable relationship, but the traditional indicators M2/GDP shows a negative relationship. Second, through the further panel data analysis of ECM in the cross-section dimension, it shows the efficiency of financial intermediation and lending rates of non-public enterprises have played a positive role to the development of China's total factor productivity, the traditional bank-based financial intermediaries still play a major role. Finally, give the advices of by encouraging and improving the non-public financial intermediary development, breaking the monopoly of state-owned financial intermediaries, reducing the barriers to enter to further improve the financing mechanisms of non-public enterprises, speed up inter-regional exchanges and economic and financial market intermediation and China's financial deepening and financial innovation, strengthen the financial, financial supervision and financial legal system, optimize the environment of China's financial market.