The Empirical Research On The Contribution Of The Financial Industry In Shandong Province

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. The modern financial industry has functions of effectively mobilizing deposit, optimizing the distribution of resources, reducing transaction cost and agency cost during payments and settlement, disseminating market information, elaborating information advantage of professional associations, reducing information asymmetry and dispersing market risks. The contribution of finance is exactly based on the full play of financial functions. Therefore, it is necessary to conduct the measurement of financial contribution under a financial function visual.Shandong Province plays an important role in China's economic growth. Its economic development takes a speed of over 10% every year since 1990s. 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 Shandong Province. 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 Shandong Province as sample, we found that the development of financial industry in Shandong province is relatively lagging behind the economic growth. This paper is organized into 4 parts:Part I defines the contribution of finance theoretically and gives a review of related theories and studies. The financial contribution is defined into direct and indirect aspects. Financial functions and its mechanisms are expounded as a foundation. After summarizing theoretical and empirical studies, we also sum up the value, purposes, innovations and the structure of this paper.Part II is a summary for the development of Shandong's economy and financial industry. Compared the financial depth, financial assets, financial intermediation and financial markets with other provinces, the conclusion can be initially drawn as the...