A Research On The Influence Of Jiangsu Financial Market Development Towards Economic Growth

Finance is an important part of modern economy, which is playing an increasingly important rolein the allocation of social resources. On the background of global recession which is caused by U.S.subprime mortgage crisis and the debt crisis in Europe. The research on the relationship of financialdevelopment and economic growth is becoming the hot issue of intellectual. Traditional theory offinancial and economic development suggests that the financial markets promote the flow of elements;they help optimize the allocation of social resources and make the total social output increase, and sopromote the economic growth. China’s economic and financial developments have been rapidlydeveloped since1979.As a developed province of China, analysis of the Jiangsu’s successfulexperiences and the lack of development has important theoretical significance and practical value topromote the sound development of the relationship between the financial markets and economicgrowth.Based on the theory of financial development, this paper collected the literatures about therelationship between the financial development and economic growth. On the perspective of regionaleconomics, I made Jiangsu Province as an object, studied the relationship between financialdevelopment and economic growth. Firstly, introduced the background, significance and possibleinnovation, and then reviewed the history of the theory.Secondly,analyzed the overview and featuresof the development of economic and financial market of Jiangsu province and clearly defined thereseach subject.Thirdly,analysised the influence of Jiangsu Provience financial development to theeconomic growth by empirical approach.I uesd the ADF test，co-integration test,and Granger causalitytest to analysised these indicator data,and according the coefficient of linear model,reserached theinfluence of the three part of the finacial market to economic growth.The empirical analysis resultsshown that since1995, there was the long-run equilibrium cointegration relationship which existedbetween Jiangsu Province’s financial market development and economic growth.and the developmentof finacial market was the granger cause of economic growth,which plays a more significant role inpromoting for economic growth.Finally,on the basis of the results of the general analysis andempirical analysis.the paper points the necessity that further improve the financial markets in order topromote economic growth in Jiangsu, and gives some related suggestions and measures.