How do the Development of Futures market and regional economy interact? Evidence from Henan Province in China

Abstract

The futures market serves the real economy is an urgent need to develop the capital market. Studying the interaction between the development of futures market and regional economy is of great significance for promoting their coordination and development, especially for the directional guidance of the development of the futures market in the long term. This paper studies the relationship between them from the perspective of regional economics. Firstly, it analyzes the mechanism of mutual influence between the futures market and the regional economy. Secondly, it establishes a VEC model based on representative data from Henan Province in China to discuss this relationship. The outcome indicates the development of the futures market and the regional economy promote each other in the long-run. At the end of the paper, some policy implications from the conclusion are put forward.