The Promoting Effect of Financial Development on Economic Growth: Evidence from China
Xianming Fang and
Emerging Markets Finance and Trade, 2014, vol. 50, issue 1S, 34-50
We study the promoting effects of financial development on economic growth in China. We investigate the effects of developments in the banking, securities, and insurance sectors on the outputs of China's primary, secondary, and tertiary industries. Since China's provincial economic growth shows significant spatial dependence, we construct cross-sectional spatial regression models to study effects year by year, and panel spatial regression models to study overall effects. Empirical results show that the banking and insurance sectors provide significant promoting effects on economic growth; the promoting effect of the securities sector is uncertain.
Keywords: economic growth; financial development; promoting effect; spatial regression model; three major industries (primary secondary and tertiary) (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:mes:emfitr:v:50:y:2014:i:1s:p:34-50
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