A Research About The Relationship Between Trade In Financial Services And Economic Growth

With the acceleration of economic globalization, financial sectors play more and more important role in the economy. Since World War II, world trade growing faster than the growth rate of world GDP, and about quarter of the world's trade is from services trade such as the banking, insurance and communication services items. Since the establishment of GATT in 1947, the world trading system has been focusing on trade in physical goods, rarely care about services trade, particularly trade in financial services. However, this situation has changed since the establishment of the GATS framework.In recent years, with the continuous development and strengening of East Asian regional cooperation, East Asian countries began brewing to establish an East Asian Community. This is related to the development general situation in East Asia and the fundamental interests of countries in the region major events, and affect relations between countries and regions in East Asia, even the whole world situation and a profound impact on the international strategic situation. Especially since 2007, the U.S. financial crisis caused by subprime mortgage , sweeping the world. Worldwide financial markets allocation of resources dysfunction. So far, the East Asian countries to strengthen financial cooperation, and reshape the financial order to become a strong pillar of economic stability and development. This article from the perspective of international trade to investigate the East Asian Community in order to strengthen the need for trade in financial services, and analysis of trade in financial services regional economic development. This article from the perspective of international trade to investigate the necessity of trade in financial services of East Asian Community , and analyze the impact of regional economic development of the trade in financial services. I will explore the linkage between trade in financial services and economic growth at the framework of the theory that services trade affect economic growth. In my view, financial intermediaries can reduce transaction costs and reduce information costs, and conducive to specialization. Through the introduction of trade in financial services liberalization, this advantage will be further expanded. At the micro level, the financial services market opening will have positive effect to domestic financial sector, thereby affecting the country's economic growth. From the macro, trade in financial services liberalization also contribute to the global economy and financial development. I develop an analytical model by using a cross-country data to verify the following two propositions : (1) whether the growth in the size of financial institutions to promote trade in financial services? (2) how trade in financial services affect economic growth? To answer these two questions I have collected the ASEAN +3 plus India and Russia's panel data spanning 2001-2008, using the latest software Eviews6.0, to establish a panel data model and analyze this issue. Research on this issue not only for China's financial development and stability is of great significance, Research on this issue not only for China's financial development and stability is of great significance,but also the financial cooperation in East Asia has enormous significance. The result shows that the increase in the scale of banking sector assets of the major countries of East Asia promote trade in financial services, and then trade in financial services promote the economic growth. This article attempts to examine the financial scale of trade in financial services, from a microscopic perspective as a starting point, to explore the eventual impact on economic growth, I want to offer my own modest strength in this field. In this paper, both theoretical and empirical, systematically discussed trade in financial services promote economic growth, This article is divided into six parts as following.Part 1, introduction, This part of the paper is to study the background and significance , and then briefly discussed, research at home and abroad are classified and summarized, and then made a simple comment, Finally,discussed the innovation and Shortcomings of this article.Part 2, I will describe the concepts of trade in financial services and the related general theoretical analysis , brief statement of the causes of trade in financial services and effect, then analyze the traditional trade theory of trade in financial services among the applicability of the financial services and general theoretical model for trade analysis. and analyzes the general theory model of financial services trade.Part 3, I establish a structure of the model, discuses how to set a model, and how to get the data, and choose the estimation method, then makes a detailed description.Part 4, reports result of the model, and makes an explanation of the result.Part 5, based on the result of the model and the status of East Asian financial services trade, and the experience of Japan's trade in financial services liberalization, I makes some outlook of East Asian trade in financial services liberalization.Part 6, makes a conclusion of the study briefly.