Research On China 's Carbon Finance Development Under Financial Agglomeration

With the rise of economy and the rapid development of financial industry in China, more and more financial institutions and financial resources are inclined to cluster, causing regional financial differences which will inevitably affect the development of regional economy. At the same time, in the process of the economic transition, the economic development mode of high energy consumption, high pollution and high emission is undesirable. Under this background, carbon finance which is the innovation of finance emerges. Spatial agglomeration of financial industry provides some convenience to its development which is related to specific geographical space. In this paper, spatial economic theories and modern econometrics methods are used to explore the spatial correlation between financial agglomeration and carbon financial development, meanwhile the research of function mechanism is made, also including the impact analysis and the research of growth and radiation effects of financial agglomeration on carbon financial development. All these discussions are very meaningful which will play a certain theoretical and practical part to the development of China’s carbon finance.Though the period is short and the overall level is low, there are obvious differences among areas’ carbon financial development, and carbon finance develops faster in the aeras with high level of financial agglomeration, also the low carbon level of economy and finance is higher. According to the general experience, the spatial distribution of financial agglomeration and carbon financial development has certain relevance. From this perspective, this paper theoretical analyzes the function mechanism of financial agglomeration on carbon financial development. In the areas with high level of financial agglomeration, for carbon financial development, the improvement of the level and efficiency of investment and financing speeds up the flowing of funds and reduces the transaction cost which provides the capital conveniently, the concentration of financial talents, the transmission of tacit knowledge and the strengthening of mutual learning motivation expedite the financial innovation and technological progress which provides the talent and technology, and the cooperation between financial institutions and the mature financial regulations create favorable environment. In this paper, KSDIM model with variable of financial agglomeration level is constructed. Through the analysis of model, it can be found that financial agglomeration is helpful to improve the return and growth rate of low-carbon capital. The region with high level of financial agglomeration will become the core aera. In this aera, the development level of carbon finance is much higher than other regions’. At the same time, the distribution of equilibrium location of carbon financial development is simulated with the use of Matlab software. Through the analysis of the model, it can be found that financial agglomeration has growth effect on agglomeration areas’carbon financial development and radiation effect on surrounding regions’. The former can be achieved by local market amplification effect and circulation and accumulated effect, and the latter can be achieved by the capital spillover effect and the welfare compensation effect.In order to test the conclusions of theoretical analysis, this paper uses the Eviews8.0 and GeoDa0.95i econometrics softwares to analyze the the function mechanism, the growth and radiation effects of financial agglomeration on carbon finance. The empirical results support the theoretical point of view. By establishing a panel data model, the empirical test of the relationship between financial agglomeration and carbon financial development (including the "quantity" growth and "quality" improvement) is carried on from the perspective of overall and sectors. The results show that financial agglomeration has positive role to carbon financial development which is achieved mainly by promoting the "quality" of carbon finance, but the promotion to the "quantity" of carbon finance is not certain which has much to do with the carbon trading mechanism. The area with higher level of financial agglomeration has more apparent promotion to the "quality" of carbon finance. The human capital level and local market scale have also promote the "quality" of carbon finance. Meanwhile, by the use of spatial econometric analysis method, the growth and radiation effects of financial agglomeration on carbon finance are tested. The results show that financial agglomeration has obvious positive spatial correlation with the "quality" not "quantity" of carbon finance. Financial agglomeration has positive inter-dstrict spillover effect on the "quality" of carbon finance which means that financial agglomeration will not only promote the local "quality" of carbon finance, also radiate the "quality" of carbon finance of surrounding areas. Regrettably, there is no growth and radiation effects on the "quantity" of carbon finance.Therefore, in order to promote the development of carbon finance, it is need to reasonable position financial agglomeration areas, improve the level of capital accumulation and increase financial talent reserve, so as to amplify the advantages of regional financial agglomeration, thus enhancing the growth effect on carbon financial development in agglomeration areas. It is also need to integrate financial institutions system, build unified financial market system, establish public information service platform, so as to strengthen regional financial cooperation, thus palying the radiation effect on carbon financial development in surrounding regions effectively. It is need to take international experiences as lessons, improve the management function of government and strengthen the financial regulation, which includes establishing unified carbon trading platform, trading mechanism, relevant laws and regulations and supporting policies, so as to serve the "quantity" growth and the "quality" improvement of carbon finance well.