Financial Development and Poverty Alleviation in China: an Empirical Test with ARDL Approach

Using data from 1978 to 2010 in China, the paper utilizes Auto Regressive Distributed Lag (ARDL) approach to exam the relationship between financial development and poverty alleviation based on their realistic achievement. The findings indicate that the poor benefit from financial development, nothing to do with the financial development indicator is financial scale (M2/GDP) or financial structure (liquidity assets/total assets). However, there is long and short run single causal between financial scale and headcount ratio and bidirectional causal relationship when financial structure as financial development.