This paper analyzes the relation between financial development, urban facilities and China’s urban household consumption using dynamic panel model. The empirical results show that the expansion of the size and efficiency of financial institutions has a delayed impact on household consumption, but the effect of urban facilities is not clear. Except coverage rate of tap water, coverage rate of gas and per capita public green area, the effect of other 3 variables are not significant. Besides, we also find that education and medical expenditure and house price have significant effect on household consumption, but don’t find powerful evidence of the effect of macroeconomic and demographic factors.

A Study of the Relation between Financial Development, Urban Facilities and Urban Household Consumption

In this paper, the panel smooth transition regression model was used to analyze the relationship between financial development and economic growth empirically. The paper mainly studied the effects of proportion of total loans of regional financial institutions in GDP on the output elasticity of capital, labor output elasticity and returns of scale. The empirical results show the level of financial development has a nonlinear diminishing relationship with the capital output elasticity, and has a nonlinear increasing relationship with labor output elasticity and returns of scale. Index Terms - Panel smooth transition regression model; Financial development; Economic growth 1. Introduction Both China's economy and finance have been developed rapidly since the reform and its opening up. The financial industry has undergone tremendous changes with the economic .China's financial sector is almost zero at the beginning of the reform and its opening up. Financial types are greatly enriched now, and there is a substantial increase in the total amount of financial assets. Finance has become an important means of government macroeconomic regulation and optimizing allocation of social resources. Economy is showing the characteristics of financialization increasingly .So modern finance plays a vital role in economic growth. In this context, the impact of finance development on economic growth is common concerned by domestic and foreign scholars. Therefore, to study the relationship between financial development and economic growth in China has important practical significance. Financial development and economic growth has been the

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Research on the Relationship between Financial Development and Economic Growth in China: An Empirical Analysis based on Panel Smooth Transition Regression Model

This article investigates the relationship between financial sector development and economic growth for China using Grange causality tests and econometric analysis based on CobbDouglas production function type equation The results from the Grange causality tests indicate that there is a twoway relationship between financial sector development and economic growth The results from regression model further reinforce the findings of the causality analysis The conclusion is consistent with the fact the China is developing from lessdeveloped country to developed country, it also supports the supplyleading and demandfollowing hypothesis

Shi Yong

Papers

An Empirical Analysis of Financial Sector Development and Economic Growth in China