Dissertation
Dissertation > Economic > Fiscal, monetary > Finance, banking > Finance, banking theory

Relation of Regional Financial Development and Economic Growth

Author HanChangChun
Tutor DongLu
School Tianjin University of Finance and Economics
Course Statistics
Keywords Financial development Economic growth Panel Data Granger Causality test
CLC F830
Type Master's thesis
Year 2010
Downloads 123
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In recent years, with the financial reform deepening,the reserch on the relationship between financial development and economic growth become popular. Finance as a special industry in economic area gradually be attention. How does the finance promote the economic growth, or only to develop follwing the economic growth is the focus point of this paper. The reserch of causality relationship between financial development and economic growth derectly influnces the national industry policy and the transformation of economic growth, that the deepning and logical reserch becomes so important. From 90s, a complete financial system had began to established, this make the reserch data looks not enough to use, meanwhile, for the different area(provences), the causality relation ship between financial development and economic growth maybe different. so, to find the answer, the paper use the panel data model. This model not only increase the sample, but also improve precision of the parameter estimation. meanwhile, it can study the divergence of the different area and the DGP.With the analysis of the qualitative economics theroy,the paper lists the some kinds of mechanisms between financial development and economic growth. In this section,the paper analysis the relationship which looks the finance as an industry. The paper takes a quatitive reserch later, use the panel data Granger causality test based on fixed effect model,and elaborates the methodology.After the establishment of the variable, the paper reserched the question quatitively with the panel data Granger causality test, based on area’s panel data. The resault revealed that financial development and economic growth had biderection causality relationship, but the DGP was heterogenius, only some areas or the subgroups had this ralationship. At last, the paper explains the resault and provide some policy suggestions.

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