An Analysis On The Relationship Between Economic Growth In Gansu And The Financial Structure Optimization

Finance is the core of modern economic. Its relationship witheconomic growth has long been a hotspot of economic research. A largenumber of studies illustrate that there is a clear causal relationshipbetween financial development and economic growth. And changes in thestructure of financial is the essence of financial development. Therelationship of the financial structure and economic growth is whatfinancial structure theory research studys on. The majority of empiricalresearch at home and abroad shows that the optimization of the financialstructure can promote economic growth. Since the reform and opening upChina’s financial structure has also been a certain optimization along withthe rapid economic growth. But China has a vast territory and there areSignificant differences in the regional economic development level andfinancial structure. Therefore, it’s theoretical and practical to analyze therelationship between financial structure and economic growth in GansuProvince which abased on the financial structure theory and regionalfinancial theory.Firstly,the financial structure theory and the regional financial theoryare combed in this article and the development context of the financialstructure of the theory and the commonly used analysis indicators areelaborated. Then we discusse the interaction between financial structureand economic growth both. On the one hand the role of financial structure in the economic growth is discussed from the perspective of financialfunctions, financial assets scale, the structure of the banking sector, thefinancing structure. On the other hand we analyze the role of realeconomy in the changes of financial structure. A brief overview is doneabout the research on the regional financial theory. After detailedtheoretical overview, I believe that the study on the relationship betweenfinancial structure and economic growth should not only considered thelevel of financial assets scale, but also reasonable arrangement of thestructure, including the structure of the banking sector, the financingstructure. Second, combing analysis of the financial structure of thecommonly used indicators, we do a comprehensive analysis of the currentsituation of the financial structure in Gansu Province as well as theeconomic development. Third, we examine the relationship betweenfinancial structure and economic growth by cointegration test, errorcorrection model and Granger causality test. The study found that there isa long-term stable relationship between financial structure and economicgrowth. Finally, based on the empirical results and the main problems inthe financial structure in Gansu Province, we propose proposals ofoptimization of the financial structure.