The Research On The Relationship Between Financial Structure And Economic Growth Of Henan Province

In the modern economy, the financial system plays an important role of financialintermediation, the allocation of resources and so on. Different financial structures foreconomies bring different financial efficiency. How to improve the financial structureof the Henan Province region in order to enhance the efficiency of financial serviceson the real economy is an important issue to the regional economic growth of HenanProvince.This article is based on the theory of the relationship between financial structureand economic growth, borrowed from a horizontal comparison of the developedfinancial structure and The law of longitudinal evolution, and described the status quoof Henan Province’s financial structure and economic growth, In this basis, we makean empirical study on the relationship between financial structure and economicgrowth of Henan Provincial. In the basis of stationarity test and cointegration test, wemade the Granger causality test between economic growth indicators (includingindicators of gross domestic product and industrial structure) and financial structureindicators (including Financial International Ratio and financing structureindicators) of Henan Province. Finally, in the basis of above-mentioned qualitativeand quantitative analysis, the author puts some policies and proposals on optimizingthe financial structure of Henan Province.This paper structure is as follows: firstly, to sort out the theory of the relationshipbetween financial structure and economic growth, this paper has a generalunderstanding on this study; secondly, this paper analyzes the mechanism of theinteraction between financial structure and economic growth, makes a clearerunderstanding on how can the financial structure optimization promote economicgrowth and optimize economic structure, and how can the economic growth optimizefinancial structure, and then, makes a horizontal comparison of the typical market-based countries (U.S., UK) and the bank-based countries (Germany, Japan), and alongitudinal analysis of the financial structure evolution of the United States andJapan. And on the basis, this paper reaches the following conclusion: the financialstructure of a country or region subject to economic, social, political, legal and other aspects, therefore, That’s not right to pursuit of the financial structure of the developedcountries, it must to be according to the national or regional economic needs, andestablish the optimal financial structure which provides the most effective financialservice to the real economy. thirdly, this paper describes the status quo of economicand financial structure of Henan Province, and makes a preliminary understanding ofthe economic development and the financial structure characteristics of HenanProvince; fourthly, this paper makes an empirical analysis between the financialstructure and economic growth of Henan Province, and draw some conclusions, suchas financial structure impedes economic growth and so on. The last part of this paperis going to come up with corresponding policy suggestion to perfect financialstructure promoting economic growth of Henan Province.