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The Empirical Study on the Financial Development and the Income Gap of Western Areas
Pages: 65-72
Year: Issue:  1
Journal: Xi'an Finance

Keyword:  financial developmentfinancial efficiency;
Abstract: The paper establishes a comprehensive evaluation index system of the financial development level and the income gap in western areas, and on the basis of the system, makes the empirical test on the relationship between the financial development and the income gap of China’s western areas from 1993 to 2013. The results show that there exists the long-term stable relationship between the financial scale, financial efficiency and financial structure and the income gap in the western areas, and the financial scale and the income gap present positive correlation, while the financial efficiency and financial structure and the income gap present a negative correlation. Therefore, the enlargement of the financial scale will lead to widening the income gap, and the improvement of the financial efficiency and financial structure will gradually narrow the income gap. According to the results of the empirical analysis, the paper put forward five policy suggestions to alleviate the income gap in western areas from the perspective of the financial development.The concrete suggestion are as follows: when enlarging the financial scale, attention should be paid to the financial support to the underdeveloped regions or sectors, giving full play to the ability of the financial sector and improving the environment of the financial law to improve the financial efficiency and quality, building diversified and multi-level financial system to expand the scale of direct financing, greatly developing the rural finance and overall urban and rural development, and carrying out the differential financial support policies.
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