Economic Growth Effect Of Financial Development In Developed Areas

Financial resources are the core factors in promoting regional economicgrowth,which means that different areas manifest in various development trendsbecause of diverse levels of financial development.Elements of interior structure ineach respect of financial industry have different effect on economic growth accordingto its size and stage. And the scale and utilization efficiency are the key to the fullyplay of the potential of economic factors.Nowadays,with the high-speed developmentof the modern financial industry,some regions have stepped into advanced stage witha remarkable financial aggregation level, Beijing, shanghai and Shenzhen all havebecome China’s three major financial centers.Analyzing the impact of the financialdevelopment in the relatively-developed areas will not only has a significant meaningfor self-financial development, but play a role of inspiring,demonstration, guidance inpromoting and reforming the nationwide financial development in many ways.Firstly,by constructing the location quotient value of three pillar industry includingbanking, securities and insurance industries, the financial gathering level of China’sthirty-one provincial-level regions could be comprehensively measured,then throughthe relatively analysis of the level of financial industry development in variousregions,we can finally qualitative judge that ten provinces in the east are financialrelatively-developed areas and the final study sample,including three provinces andtwo cities of Circum-Bohai Sea Economic Zone, three provinces of the Yangtze Riverdelta economic zone as well as Guangdong and Fujian.Next the detailed statisticalanalysis of the level of economic development in ten provinces and cities,especiallythe level of the financial industry progress,and appropriate comparison with thenational level, demonstrated quantitatively that once again：the ten eastern provincesand cities are the financial relatively-developed areas of China.On the basis of theStatistical analysis to the level of economic and financial development in tenprovinces and cities,we can analyze the effect of the economic growth in thefinancial-developed region by using relative data from1993to2011and utilizing the panel data fixed effects model which selects the real per capita GDP and keyindicators measuring the level of the development of interior structure of financialindustry as model variables. Finally we can draw the following conclusions:While thefinancial industry of the ten eastern provinces and cities play a significant role in theeconomic growth, banking,securities and insurance business have different functions.The level of economic monetization is the most significant factor, secondly theinsurance industry, and the securities industry plays a certain role in promoting theeconomic development which should be fully tap the potential. Due to the lowerefficiency of the allocation of bank credit, the banking sector becomes a severelimiting factor.Upon the statistical analysis and empirical conclusions above, thispaper offers an empirical analysis of the impacts of financial development oneconomic growth in the ten provinces and cities,and some suggestions.