Relationship of international trade in financial services and economic growth: The case of China

Abstract

International financial services, the financial services trade that is conducted through the financial service sectors, play a very important role in a nation economic growth. Especially the modes of cross-border supply and commercial presence have been the new economics growth point. Multiple regression models are built up based on time-series data of financial service trade and economic growth in China, then co-integration test and Granger test are used to analyze their relationship. The results are that there is long-run equilibrium relationship between the two modes of financial service trade, and both of them improve the economics growth. At last, some suggestions are given for the coordinated development of financial service trade and economic growth.