Dynamic Relationship between Financial Development, Urbanization and Industrialization of Hubei Province

This paper uses time-series data of Hubei Province from 1978 to 2013, and ADF test, Johansen cointegration, impulse response and variance decomposition methods are used to analyze the dynamic relationship between financial development,urbanization and industrialization of Hubei Province. The results indicate that they have the long-term equilibrium relationship;financial development promotes urbanization and industrialization, and this effect increased gradually over time. Besides, urbanization and industrialization have a mutual effect. But in the long term,the promotion of urbanization is greater than that of industrialization. Industrialization and urbanization are also of significance to promote financial development when they reach a certain level. Finally, the paper makes some suggestion for the above conclusions.