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Regional financial efficiency and its non-linear effects on economic growth in China

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  • Hu, May
  • Zhang, Jing
  • Chao, Chichur

Abstract

This paper examines regional financial efficiency and economic development in China. We find significant differences in financial efficiency among the eastern, central, and western regions of China and a non-linear relationship between financial efficiency and economic growth. We find that financial efficiency promotes economic growth only when it reaches a certain level (financial threshold). It increases capacity for the accumulation and allocation of financial resources where it exceeds the threshold. Rapid inancial development can provide a superior financial environment and improved conditions for economic growth to promote the continuous improvement of the Chinese economy.

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  • Hu, May & Zhang, Jing & Chao, Chichur, 2019. "Regional financial efficiency and its non-linear effects on economic growth in China," International Review of Economics & Finance, Elsevier, vol. 59(C), pages 193-206.
    • Handle: RePEc:eee:reveco:v:59:y:2019:i:c:p:193-206
    DOI: 10.1016/j.iref.2018.08.019
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    More about this item

    Keywords

    Regional financial efficiency; Gini coefficient; Theil index; Threshold regression;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • C19 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Other
    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts

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