||Development situation of a country's financial sector can show the different situations of economics development. Due to different national economic development process and policies differ from one another, so that the impact of financial development on economic growth is difficult to have a general conclusion. Therefore, the study researched the financial impact of the development on the effectiveness of economic growth, and used panel data model to demonstrate empirical research and analysis. |
This study focuses that the research process of financial development in China, and investigates the relationship of economic growth. The study uses the 286 cities in China from 2003 to 2010 annual data, and uses the fixed effects model to analyze the relationship of financial development and economic growth. The study shows inflation rate, the ratio of government expenditure to GDP, consumer price index and most of the financial development indicators have a positive impact on economic growth during China's economic development period.
Finally, the Chinese government should how to use the policy guidelines to enhance the domestic economic environment and the financial development in order to stimulate domestic production and economic activity, and the government will pay close attention to the condition.