Empirical Analysis on the Relationship between Financial Development and Economic Growth of Shandong Province

This paper adopts the related financial data of Shandong Province from 1997 to 2009, and applies the Granger Causality Test to the empirical analysis on relationship between Shandong financial development and economic growth, which is on the base of Unit Root Test and Co-integration Test. The final result of this research manifest that the financial development has apparent Granger Causality relationship with economic growth, but the effect of different financial index on economic growth are different. Finally, this paper proposes effective policy recommendation on the development of financial sector in Shandong.