Empirical Research On The Coupling Between Financial Innovation And Economic Growth In China

The relationship between financial innovation and economic growth has been widely researched in economics.The reason why some western developed countries can maintain their leading role in the world is that there is a positive cycle between financial innovation and economic growth,whereas a vicious cycle between financial innovation and economic growth can be held responsible for Asia financial crisis in 1997 and financial storm in 2008.The connection between them is so complicated that no simple causal relationship can be traced.Therefore,the paper intends to employ coupling theory in physics to analyze this elaborate relationship,which is theoretically and empirically innovative.The paper consists of five chapters,centering on second to fourth chapter.Chapter two formulates the coupling between financial innovation and economic growth,and analyzes its mechanism from three aspects: coupling agent,pattern of manifestation and risks.Chapter three calculates the coupling number of 30 provinces in China by constructing relevant model.Based on previous empirical result,paper is able to further investigate coupling status and forecasts their future trend.Chapter four makes policy suggestions regarding existing problems to promote coupling relationship between them by cluster analysis.Finally,the essay makes following conclusions:(1)There are two different patterns of coupling.The coupling value of the developed regions such as Beijing and Shanghai remains moderately high from 1997 to 2013,while in the same period,that of the underdeveloped regions such as Shanxi and Henan rose from a comparatively low range to moderate.In both regions,the coupling value will continue to rise regardless of temporary slides.Only one thing needs to be point out that their growth speed may not the same in diverse districts.(2)Problems discovered include: Insufficient investment in financial innovation,inactive stock market and imperfect supervision systems,etc.(3)The covering policy recommendations are made: modify current supervision system,increase funds on financial innovation,establish risk evaluation standard and incorporate regional characteristics.