THE DYNAMIC RELATIONSHIP BETWEEN THE INDUSTRY-STRUCTURE AND THE BANKING CREDIT-STRUCTURE IN THE REGIONAL ECONOMY OF ZHEJIANG PROVINCE-AN EMPIRICAL STUDY BASED ON VAR MODEL

Based on the vector auto-regression model (VAR), the authors probed into the dynamic relationship between the industry-structure and the banking credit-structure in the regional economy of Zhejiang Province. As is shown by the results of the empirical study, the development of the tertiary industry in Zhejiang in the past 3 years chiefly results from the growth of the secondary industry and credit expansion. Even though a positive correlation between the industry-structure of Zhejiang and banking credit-structure, it is insignificant for banking credit-structure driving the adjustment of industry-structure. The reason might be that the distinct credit expansion in recent years is chiefly benefited by the secondary industry. It is thus suggested that governments should develop and issue supporting financial policies to help the tertiary industry acquiring more financial resources, since the tertiary industry is in the weak position in financial market and can not benefit from commercial banking services.