Correlation Research Between Regional Financial Development and Economic Growth --An Empirical Analysis of Time Series from 1979 to 2020 in Qiannan Prefecture

Abstract

Since the implementation of the Reform and Opening policy, the scale of deposits and loans have been expanding in Qiannan Prefecture, Guizhou Province，China. However, the contribution rate of financial industry to Qiannan Prefecture’s GDP has been declining. Literature review showed that the correlation between financial development and economic growth is dissimilar in different regions and periods. Thus, this research established a VAR model to analyse the economic and financial data of Qiannan Prefecture from 1979 to 2020, in order to research the relationship between financial development and economic growth in Qiannan Prefecture. The results shown that Qiannan Prefecture’s financial development is positive correlation related to economic growth, regional economic growth has significantly promoted financial development. The financial development has obvious driving effect on the Qiannan Prefecture’s economic growth in the early stage, but a stable trend at low level have been maintaining in the middle and later stages.