Dual circulation development model and credit growth

Abstract

This paper empirically examines the impact of the economic dual circulation structure (DCS) on credit growth for the first time, thus expanding the existing literature on economic structure and credit growth. Using China's provincial data from 1995 to 2021, findings indicate that DCS significantly reduces credit growth, in areas with high ratio of value-added of service-to-manufacturing or with high technological innovation level, this negative effect become more significant. Additionally, fixed investment is one mechanism of this effect. our research is helpful for understanding China's sustainable economic growth and credit growth.