Exploring the Relationship Between Financial Institutions and Economic Growth from A Profit Maximization Perspective

Boxuan Yuan

doi:10.54254/2754-1169/65/20231607

Research Article

Open access

Published on 28 December 2023

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Yuan,B. (2023). Exploring the Relationship Between Financial Institutions and Economic Growth from A Profit Maximization Perspective. Advances in Economics, Management and Political Sciences,65,111-117.

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Exploring the Relationship Between Financial Institutions and Economic Growth from A Profit Maximization Perspective

Boxuan Yuan *^,1,

¹ School of Economics, University of Oregon, Oregon, U.S.A. 97403

* Author to whom correspondence should be addressed.

https://doi.org/10.54254/2754-1169/65/20231607

Abstract

Financial institutions, as the primary entities within the business sector, strive to achieve profitability and long-term expansion as their core objectives. Examining the reciprocal association between the advancement of financial institutions and economic growth through the lens of profit maximization holds considerable merit in enhancing the oversight of financial institutions. This paper examines the reciprocal relationship between financial institutions and local economic development from the perspective of profit maximization theory. It investigates the connection between economic growth and the profit acquisition activities of financial institutions, aiming to contribute to the advancement of local economic development. From the standpoint of profit maximization, the operations of financial institutions contribute to augmenting the momentum of economic progress. However, it is important to note that the unregulated expansion of financial institutions can also heighten the vulnerability of economic development, with potential consequences for excessive profit-seeking. Hence, with regards to the objective of maximizing profits, it is imperative for local governments to effectively oversee and manage financial institutions, establish a comprehensive market management framework, facilitate the well-regulated functioning of financial institutions, and foster the advancement of the economy towards high-quality development.

Keywords

financial institutions, Market system, Risk management, Economic development

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About volume

Volume title: Proceedings of the 2nd International Conference on Financial Technology and Business Analysis

Conference website: https://2023.icftba.org/

ISBN：978-1-83558-239-8(Print) / 978-1-83558-240-4(Online)

Conference date: 8 November 2023

Editor：Javier Cifuentes-Faura

Series: Advances in Economics, Management and Political Sciences

Volume number: Vol.65

ISSN：2754-1169(Print) / 2754-1177(Online)

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