| As an important part of the financial system, informal finance and commercial banks or other formal financial institutions coordinate and compete with each other, service scope, business type each have the same and particular factors. Informal finance contributed an important role in residents’welfare promotion and economic growth, especially small and medium private economic growth. However, informal finance which is out of regulation also has some irregular and unsafe factors that may have a negative impact on economic development. It can be even called a double-edged sword for the development of the economy.With the development of private economy, Liaoning informal finance has already formed a certain scale, but still don’t have full understanding and excavation. So this paper hopes to study the development of informal finance of Liaoning province in an empirical point of view to see whether it is to promote or block; whether it is positive or negative, Then to propose suggestions on how to regulate the informal finance to reduce the negative impactTherefore, this paper firstly analyzes the basic situation, the current situation and the development of Liaoning’s informal finance, then find that its development is the result of the rational choice of the market demand. On the basis of the qualitative analysis and the comparison of the advantages and disadvantages of the informal finance, this paper carries out the empirical part of this paper. Through the use of indirect estimation, this paper calculates the scale of informal finance in Liaoning and 14 municipalities. It shows that the overall trend is on the rise, but much volatiler than the normal finance. In the part of the empirical research, this paper studied the relationship of informal financial and economic development from the overall and detailed aspects and draw the following conclusions:Firstly, informal finance and economic growth in Liaoning are a long-term stable equilibrium, each change of informal finance will cause the change of GDP in the same direction. Second, informal finance has a significant positive correlation with the second and the tertiary industry which shows the informal finance can make a contribution to the increase of industry or even the industry upgrading. Third, the impact of informal finance on the tertiary industry is slightly greater than on the second industry which may due to the more SMEs in the tertiary industry. Finally, this paper concludes that the positive impact of informal finance on economy of Liaoning is greater than the negative influence and it may co-exist with the formal finance in a long time. On the basis of all the above analysis and the actual situation of Liaoning, this paper presented some relevant policy suggestions about how to effectively use the informal finance to promote economic development. |
