Financial Development and Economic Growth——An Empirical Study Based on Central China

Abstract

Using provincial panel data for central China during 1985-2008,this paper empirically investigates into the impact of financial development on economic growth by fixed effect model.The study shows the central region's financial development hasn't become the driving factor of economic growth after fiscal decentralization reform.And the main reason for this can be attributed to the intervention of local governments,unreasonable structure and inefficiency of finance etc.