Abstract
With the panel data in 29 provinces and cities in China from 1991 to 2007, this paper applies the dynamic panel data model to empirically explore the relationships between financial development scale, structure, efficiency and economic growth. The results show that after controlling other factors, financial scale has significantly positive impact on economic growth in middle and western regions but negative in eastern region; while financial structure and efficiency exhibit significantly positive effects only in eastern region. This paper then adopts the model of panel data VAR to investigate the causality relationships between them. It finds that the “demand-following” phenomenon between financial development and economic growth occurs in eastern region, the “supply-leading” phenomenon happens in western region, and yet the middle region shows no obvious pattern of financial development. Key words: Financial scale; Financial structure; Financial efficiency; Economic growth
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