Study On The Interrelations Between Bangking Development And Economic Growth In Hebei Province

In recent years, the economy has been growing rapidly in Hebei Province, and its growth rate has remained at double digits. Meanwhile, the main regional financial industry of banking has also made considerable progress, the integration of resources has been intensified, and various sectors of the bank has landed on the Hebei, which makes the competition among banks increasingly intensified. Based on the theory of the relationship between financial development and economic growth, combined with the theoretical and empirical research on the relationship between banking sector development and economic growth at home and abroad. The paper focuses on discussing the relationship between the economic growth and the development of structure, scale, development efficiency of the banking sector of Hebei Province, which uses the data of1987-2009for Hebei Province and puts some methods into the thery of industrial organization,such as Cointegration test, Granger causality test, measurement methods based on the model impulse response and variance decomposition, as well as non-parametric test (DEA) and so on.Empirical results show that the efficiency of the joint-stock banks in Hebei Province is generally higher than that of the four state-owned banks. In Hebei Province, there is a positive correlation between banking development efficiency and economic growth. While, the banking size plays little role in boosting economic growth, even impedes economic growth, and there is a reverse correlation between banking market concentration and economic growth. Granger causality test has found that there is no causal relationship in two-way between banking structure, scale development efficiency and economic growth in Hebei Province, which indicates that the relationship between banking development and economic growth in Hebei Province is uncertain. Thus, a bridge is further needed to be built to connnet them.In the paper, according to the empirical results, the corresponding policies and suggestions are proposed for the development of banking and economy in Hebei province. they can improve the banking financial assets quality, maintain banking deposit and loan scale healthy growth in Hebei province. Meanwhile, they can speed up the adjustment of banking industry structure, promote the development of small and medium-sized banks and the reform of economic structure, and encourage the development of the private economy.