Research On The Relationship Between Financial Structure And Economic Growth In China

Finance is the core of modern economic. Its relationship with economic growth has long been a hotspot of economic research. With the deepening of the research, its perspectives of the relationship between financial structure iscontinuously refined. And its samples are more and more diversified. Based on thisresearch background, this paper discussed the relationship between china’s financialstructure and economic growth.Firstly this paper briefly reviews the relevant theory of financial structure and economic growth, and outlines the analysis ideas through the relevant theory; Next, threading on the above analysis, the paper deeply discusses the internal relationship between financial structure and economic growth, which analyzes with two paths, the one is the mechanism of financial stricture on economic growth, the other one is the mechanism of economic growth on financial structure, and shows that dynamic loop relationship between them does exist. What’s more, the present situation of China’s financial structure and economic growth were analyzed, according to the scale of financial assets and the distribution, structure of economic growth and three industrial structure, suggests that financial assets and economic growing have significant increase, but there are some unbalanced and uncoordinated problems.Then this paper uses principal component to simplify many financial structure indicators into two integrated factors, namely total finance factor and financial efficiency factor,using these two factors builds VAR econometric models, which show that the total financial factor and financial efficiency factor has a catalytic effect on economic growth and economic growth has catalytic effect on both financial factors.Finally,this paper gives the proposals of financial structure in order to promote economic growth based on the analysis of the previous chapters, as well as the prospects to the shortcomings existing in this paper.