| Summary: | 碩士 === 國立成功大學 === 政治經濟學研究所專班 === 97 === The thesis aims to explore the relation between financial development and economic growth in China, it employs Feder two-sector dynamic model quarterly data from 1993 to 2007, to analyze the type of financial development and estimate its spill-over effect. Instead of using M2 as a proxy of financial development, the study selects loans to non-financial institutes to represent indirect financial market, and market values of stock markets to represent direct financial market. The Unit-root tests are conducted for all the variables and reveal stationary and hence the OLS can be performed directly.
To explain China’s economic growth rate, the empirical results indicate: (1) in supply-leading model, the explanatory variables of financial sector growth rate, previous economic growth rate, change rate of labor, share of capital formation in GDP are significant; (2) which in demand-following model, grow rate of real sector, share of capital formation in GDP, change rate of labor, previous economic growth rate are significant. In the estimation of spill-over effect, the marginal externality in demand-following model is far greater than the supply-leading model. In addition, an increasing marginal externality occurs in demand-following model; which a decreasing marginal externality occurs in supply-leading model. The discoveries show that in the beginning of China’s economic development, financial sector is the supply-leading for the economic growth; in the latter stage, it becomes the type that economic growth stimulates the demand-following in financial sector. The implications support Patrick’s hypothesis.
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