Relationship between regional financial development and economic growth (Analysis based on panel data)

Development of financial markets as an important factor in the economic growth process always has been of interest to economists. Financial market development is the secret of survival in advanced economies. Bank, insurance and stock are symbols of three markets Contains money, capital and supply reliability as a subset of Financial market (Kadkhodaee, 2002) Banks and non-bank credit institution Deposits are classified as financial intermediaries and stock exchange, pension funds, leasing, investment companies and insurance companies are classified as non-deposit financial intermediaries. Insurance development affects economic growth through channels of Financial stability, the completion of the government social security programs, facilitating trade and transactions, helping to accumulate savings, helps to reduce damage, contributing to efficient allocation of capital (Jaafari Samimi & Kardgar,2008) Several studies have been made about the relationship between financial development and economic growth at the national level but these studies have been limited at the provincial level. This research is the development of studies in this field using panel data as a powerful method and its purpose is to identify and determine the relationship between financial markets and economic growth in the regions. The distinctions of this research from other studies in the literature include: 1-In this study, the panel patterns based on provincial data have been used. 2-The effect of financial development variables divided of the money market, stock and insurance have been studied on economic growth separately. 3-Short-run and long-run effects of the variables are separated.