Financial Development In Chongqing Empirical Study Of The Role Of Urbanization

With the pace of urbanization is accelerating in Chongqing, the problem ofurbanization has become the focus of attention. Especially, since Chongqing is set up toNational urban and rural comprehensive reform pilot area,urbanization has become theimportant aspect of economic development of Chongqing, which led to special attentionand research on the meaning and power of urbanization. Funds usually play a decisiverole in the evolution of urbanization, financial as an important financing channel ofmodel society, in the urbanization process, analyzing the function of financialdevelopment also should become the issues which we need to concern. According toresearch the role of financial development to urbanization, to create a better financialenvironment, to give full play the role, and solve the fund problems in the process ofurbanization has an important practical significance.The paper uses the method of combining theoretical analysis and empiricalresearch to discussing the role of financial development to urbanization in Chongqingmunicipality. On the theoretical side, the article firstly summarizes the theory of therelationship between financial development and urbanization, and makes a briefoverview for the theory of financial development and urbanization. On this basis,analysis of the mechanism of action of the financial development to the urbanizationprocess, put forward the finance can make more money into investment, improve theefficiency of utilization of funds, provide funds for the construction of urbanization.Through the capital supporting from finance, promote the construction of urbaninfrastructure, adjustment of industrial structure and the development of SMEs, thusincreased the demand for surplus labor of rural. The main channel of financialdevelopment makes effect on the urbanization have three aspects: support funds to theinfrastructure of urbanization, to the industrial restructure and optimize, to themodernization of agriculture in the process of urbanization. In the empirical, the articlebased on the multi-variable VAR model, and used finance-related rate, financialstructure, medium-long term loan ratio, financial efficiency as the control variable,used of the Single Root Test, Co-integration Test and Error Correction Model test,Granger Causality test to analysis of financial development played role in theurbanization in Chongqing municipal from1990to2010.The results show that the scale of financial development, structural changes, aswell as the efficiency improving play a long-term role in urbanization in Chongqing. They present a long-term positive correlation. Thus, we can conclude that they havethe same direction of development and changes in the long term. Deepening of thedegree of financial development will lead to raise the level of urbanization, pushing theprocess of urbanization. There are Granger causality between financial developmentand urbanization in Chongqing, and this relationship is not only one-way in a way, theyare mutually Granger reason. However, the influence of urbanization process onfinancial development is not significant in statistically.Finally, the paper puts forward the corresponding countermeasures and suggestionsin the process of urbanization.