An Empirical Study Of The Relationship Between Financial Structure And Economic Growth

In recent years, experts and scholars paid more attention to the research of therelationship between financial structure and economic growth. With the deepening ofthe research, its perspectives of the relationship between financial structure iscontinuously refined. And its samples are more and more diversified. Based on thisresearch background, this paper discussed the relationship between china’s financialstructure and economic growth.This paper summarized the research results about the theory of financialdevelopment and the theory of regional finance. It pointed out which most particularlyemphasized on studying how financial development contributed to economic growth.Then, in order to measure financial structure, this article selected four indicators fromthe stock market and capital market. At the same time, this paper used china’sprovince panel data from2000to2009so as to analyze how the financial structureinfluenced economic growth. The results showed that the extent and scale of stockmarket can promote economic growth, but the total size of credit is negative witheconomic growth. We also used china’s time-series data from1993to2009andexamined the causal relationship between economic growth financial structure. Theresults showed that the two indicators which were used to measure stock market aresecuritization and liquidity, the relationship between them and economic growth isGranger causality. The relationship between the total size of credit and economicgrowth is Granger causality too. In addition, we found that there existed aunidirectional causality between financial efficiency and economic development, buteconomic development couldn’t improve the efficiency of financial. All of thesefindings with the previous theoretical analysis is consistent.Finally，the paper proposed policy recommendations of the finance developmentin order to promote economic growth. This paper argued that we should take thefollowing measures: first, we should improve direct financing market, and meet theFinancing need of enterprises; Second, we ought to supervise severely as well aspunish excessive speculation and lawless speculation; Third, we should take effectivemeasures, efforts to solve the financing problem of SMEs; Fourth, we ought toestablish modern enterprise system of financial structure, and improve the efficiencyof financial; Fifth, we should meet demand for financial services and funds, and promote financial innovation.