Financial Reforms, Growth And Regional Disparity In Post-Reform China

In this paper, by employing the Generalized Method of Moment (GMM) techniques and Chinese provincial level data from 1991 to 2003, the authors empirically investigate the relationship between finance and growth in post-reform China. They find that financial development significantly promotes economic growth in coastal regions but not in inland regions; the weak finance-growth nexus in inland provinces has exacerbated China's regional disparity. This empirical results show that financial development significantly promotes economic growth in coastal regions but not in inland regions; the weak finance-growth nexus in inland provinces may aggravate China's regional disparities.