The Impact Of Our Financial Development On Foreign Trade

As important variables that effect a country's economic growth, both financial development and international trade have been drawing attention of domestic and foreign scholars. Developed financial system contributes to capital accumulation and technological innovation, thus financial development theory suggests that financial development can promote a country's economic growth though optimizing allocation of resources. International trade theory also suggests that trade liberalization can enhance a country's welfare though optimizing allocation of resources. However, related to the cross-area of internal relation between financial development and international trade, the researches attract little concern. Financial sector is a special sector, and financial system can help to lower risk, allocate resources effectively, mobilizing savings, facilitate transaction, strengthen supervision and management, and do other functions which all have a role in promoting international trade. Financial development can affects a country's foreign trade by size, structure, pattern and so on. There are also some scholars, instead, study the important role trade openness acts on a country's financial development.From the perspective of China, this dissertation discusses the influence of financial development level on foreign trade, which has profound mean to reform financial system, deepen financial development, bring financial development and international trade into play, and promote economic growth. This dissertation includes five chapters:The first chapter briefly describes the background, significance, research ideas and methods, as well as innovation and weaknesses. The second chapter reviews both domestic and foreign research results on the influence of financial development on international trade. In particular, the author analyzes the influence from the ways of comparative advantages and economies of scale. The third chapter deeply analyzed the impact of financial development on international trade in theory, including the impact of financial repression and financial deepening on international trade, as well as pattern and approaches that financial development influenced international trade. The forth chapter used econometrics method to provide a positive analysis on the level of financial development impacting on foreign trade from the standpoint of both comparative advantages and economies of scale. The final chapter summarized the conclusions of empirical analysis and put forward some my own point of view at the same time.