Finance Threshold Effect Research In Regional Economic Growth

Financial and economic relationship is always high-profile research field, the research theregional finance attracts a lot of domestic and foreign scholars. Since China’s reform and openingup, economic and financial made great development, but regional development’s unbalancedquestion also appeared. The new period, the party and the country put forward the construction ofharmonious society and strengthening national financial security requirements. Therefore, the studyon the relationship between China’s regional economic and financial research have theory value andpractical significance.This paper’s study is based on drawing lessons from home and abroad on the basis of existingresearches. First of all, make theoretical research on the relationship between the regional financialdevelopment and regional economic growth. The paper constructs regional economic growth modelincluding financial departments under spatial economic theory, and discussed the relationshipbetween the development of the financial sector and the regional economic growth from the point ofsymmetric and asymmetric view. On the basis of theoretical model, this paper use panel thresholdmodel to analysis China’s31provincial level administrative regions’ data to study the influence thatthe finance level to regional economic growth. The results show that:(1) theoretical studies show thateconomic growth is not only associated with the area’s own factor endowment,but also with otherareas’ factor endowment.(2) in certain conditions, there is financial threshold effect in the regionaleconomic growth, the threshold effect depends on whether there are regional factor endowmentdifference.(3) the empirical research shows that, when taking the regional banking developmentlevel indicators to measure the regional financial development level, regional economic growth havefinancial threshold effect: when the regional financial development in low level, the development offinance hinder the regional economic growth; when the regional financial development in high level,the development of finance promote the regional economic growth.