Financial Development & Economic Growth Under The Theory Of Optimal Financial Structure

The view that country's economic growth always grows and upgrades in a certain structure can be simply divided into two parts which is the real economic structure and the financial structure.According to the viewpoint of new structural economics,There are structural differences in real economy of different structures such as different financing scale and information symmetry of risk control and structure of financial products and so on,which the real economic structure of countries in different development stages is not the same.The optimal financial structure theory is to adapt the financial structure to the financing demand structure of the real economy,and to adjust the financial structure with the upgrading of the real economic structure,so as to promote the smooth process of economic growth.The theory of optimal financial structure(TOFS)is a branch of new structural economics.From the perspective of TOFS,this paper studies the internal influence logic between financial and economic,which can make a dynamic analysis of financial structure and get an effective financial development path.Firstly,in the perspective of TOFS,the paper constructs the optimal banking industry structure and the optimal financial structure based on the financing mode,which aims to analyze and find the most efficient financial development path.Secondly,based on the theoretical analysis of the optimal banking industry structure and the optimal financial structure model,and the economic achievements of China's reform and opening up,this paper analyzes and discusses how the great leap of China's economy coincides with the financial development path.Thirdly,this paper analyzes the changes of China's financial structure and the matching with industrial characteristics by using the provincial panel data,discusses the differences in financial development in different regions of China,and studies the transmission mechanism of financial development to economic growth.Finally,through the theoretical analysis and empirical results,this paper gives advice to the financial development path of the late developing economies,and draws the conclusion of this paper,and puts forwardcountermeasures and suggestions.The conclusions of essay are as follows:(1)Financial development can greatly promote economic growth,which is the significant positive effect of financial structure upgrading on economic growth and the positive effect of bank industrial structure and finance industrial structure on enterprise development and industrial upgrading.(2)From the perspective of supply and demand,financial development is endogenous to real economic growth,which the change of real economy demand for "products" has led to the upgrading of financial structure.(3)Restricted by the difference of resource endowment and initial conditions of development in different economies,the most effective financial development path for economic growth must be different,which is differences in the optimal financial structure of different economies.There are some inspirations as follows:(1)The adjustment of regional economical financial structure should focus on its own development status and resource endowment,instead of blindly copying the development policies of developed regions.(2)In economic development,we should pay attention to structural financial risks,which the destruction of one financing market equilibrium will spread to other financing markets because of strong correlation between financing markets.(3)As the finance market breaks through the limitation of region and time distinctness,financial polarization and diversification of finance methods become the new trend of financial development,which promotes the efficiency of financial services to improve again.