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Regional financial efficiency and its non-linear effects on economic growth in China

May Hu, Jing Zhang and Chichur Chao

International Review of Economics & Finance, 2019, vol. 59, issue C, 193-206

Abstract: This paper examines regional financial efficiency and economic development in China. We find significant differences in financial efficiency among the eastern, central, and western regions of China and a non-linear relationship between financial efficiency and economic growth. We find that financial efficiency promotes economic growth only when it reaches a certain level (financial threshold). It increases capacity for the accumulation and allocation of financial resources where it exceeds the threshold. Rapid inancial development can provide a superior financial environment and improved conditions for economic growth to promote the continuous improvement of the Chinese economy.

Keywords: Regional financial efficiency; Gini coefficient; Theil index; Threshold regression (search for similar items in EconPapers)
JEL-codes: G01 C19 E01 (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1016/j.iref.2018.08.019

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