Threshold Effect Of Financial Development On Economic Growth

As an important engine of economic growth,finance plays an important role in economic growth.Since the reform and opening to the outside world,China's financial development has been continuously improved.Both the scale of financial development and the efficiency of financial development have been greatly improved,and correspondingly,the level of economic development has gradually accelerated.In 12th Five-Year and 13th Five-Year plan,deepening the reform of financial system,highlighting the core financial status in the economy has been an important goal.Especially in the 13th Five-Year plan,the government clearly put forward to accelerate the reform of the financial system process,gradually improve the efficiency of financial services in the real economy,and actively cultivate a transparent,healthy development of the capital market,in order to achieve to maintain rapid economic growth in the target and escort.Financial development has been placed on so high strategic position,it fully demonstratesthe importance for economic growth,which has caused the domestic and foreign experts on financial development and economic growth more deeply and widely.However,it is undeniable that the current China's financial reform process has been pushed into the deep water area,the financial service of the real economy needs to be further improved,and the efficiency of financial services in the real economy should be further improved.In view of this problem,domestic scholars have studied and proved it from different angles,and a series of important conclusions have been drawn,which can be roughly divided into simple linear and nonlinear.Based on the above background,this paper mainly studies the financial threshold effect of China's financial development on economic growth from the nonlinear point of view.First of all,this paper summarizes the relevant economic theoretical and empirical literatures at home and abroad,and then,as the theoretical basis and empirical reference of empirical modeling,determines the main content of this paper.Secondly,this paper makes a comprehensive summary of the current financial development and economic growth in China,and presents it with a combination of graphics and text.Then we use the 30 provinces in China during 2004-2016 financial development and economic data as sample data,respectively,using the efficiency of financial development and financial development scale as the threshold variable for empirical analysis,drawing a regional financial development for economic growth of is not constant,it will have different influence for economic asthe improvement of the efficiency and scale.In order to reflect the influence caused by regional differences,this paper further analyzes the differentinfluencesof economic development efficiency and financial development.Similarly we use efficiency and scale as the threshold variable on economic growth in the three major economic regions of the East,the middle and the west.It was found that whenwe use the efficiency of financial development as the threshold variable,the eastern and central region financial development efficiency level for the nonlinear effect of economic growth still exist,and with improving financial efficiency,financial development efficiency for the effect of economic growth will be reduced,but from the western region,financial development level for the nonlinear effect of economic efficiency growth is not reflected in the scale of financial development;but whenwe use the scale of financial development as the threshold variable,the scale of the development of the central and western regions financial for nonlinear economic growth still exist,in the eastern region,the scale of financial development for the nonlinear effects of economic growth is not reflected.Finally according to the empirical results,we put forward three policy suggestions:(1)continue to expand the scale of financial development in our country,improve the overall efficiency of financial development;(2)strengthen regional financial resources flow,and gradually narrow the gap between regions;(3)give full play to regional financial advantage,effectively promote regional economic growth;(4)establish the perfect financial legal system,improve the healthy development of the financial system.