An Empirical Research On The Impact Of Financial Development On Urbanization In China

In recent years, urbanization has developed rapidly in China and has made brilliant achievement which attracts worldwide attention. Practice has proved that various areas of urbanization all need financial support during the Urbanization in China. The impacts of financial development on population urbanization, industry urbanization and space urbanization have different degrees. It is the key factor which promotes the sustainable development of urbanization in China. Therefore, it has important realistic significance to research the impact of financial development on Urbanization deeply in China.This paper’s author researches and evaluates the theories of urbanization and financial development firstly, and reviews and comments existing theories, literatures and achievements in the aspect of the impact of financial development on Urbanization, in order to provide theoretical basis and research reference for the following research on the impact of financial development on Urbanization in China.In the part of present situation research, the author analyzes the histories and present situations of urbanization and financial development in China in detail. The research results show that, now in China, the level of population migration is still low, the levels of rationalization and advanced of industrial structure are also low, the function of city system is not sound and coordinated, the function of rural financial system is incomplete, the financial support to rural urbanization is not enough, and there is a lag between optimization and upgrading of industrial structure and financial support. These problems all need to be solved as soon as possible.In the part of measure research, the author builds up the level measure index system of urbanization with nine indexes and the level measure index system of financial development with eight indexes by using the improved entropy method to analyze the weight of each index, and measures and analyzes the actual levels of urbanization and financial development in China over the last 20 years.The measure and analysis results show that,in the aspect of urbanization, the whole level of urbanization had increased steadily and showed accelerating trend from 1994 to 2013 in China, its value had doubled nearly. The levels of population urbanization, industry urbanization and space urbanization also had doubled nearly. The above quantitative analysis results show that, the whole level of urbanization was the result of joint action of the levels of population urbanization, industry urbanization and space urbanization. The uniformity of their level trends indicates that the three aspects of urbanization had kept coordinative development in China.In the aspect of financial development, the whole level of financial development had showed rising trend gradually and increased 33.23% from 1994 to 2013. The author’s calculations show that, the whole level of financial development was the result of joint action of the levels of financial development scale, financial development structure and financial development efficiency. The increasing of the level of financial development scale was the most remarkable, about 82.95%, and its rising trend was very steady. The increasing of the level of financial development structure was in the middle, about 18.82%, its level trend line showed fluctuant rising trend in narrow scope. The increasing of the level of financial development efficiency was the least remarkable, about 2.08%,its level trend line liked a horizontal line nearly. Based the above analysis, the author analyzes the causes deeply according to the unique characteristics of their level trend lines.In the part of empirical research, using the above measure data of the levels of urbanization and financial development from 1994 to 2013 in China, the author analyzes the impact of financial development on Urbanization in China quantitatively by constructing regression analysis model and testing Grainger causality.The quantitative analysis results show that, in China, on the whole level, financial development was the Grainger causer of urbanization. There was a stable, remarkable, long-term relationship between financial development and urbanization. When the level of financial development increased 1 unit, the level of urbanization would increase 1.004 units. On the local level, financial development scale and financial development efficiency were the Grainger causers of space urbanization, financial development structure was the Grainger causer of people urbanization. They had different emphases, and complemented each other to affect Urbanization together. For both the population urbanization, industry urbanization, space urbanization and the whole urbanization, financial development scale had always showed remarkable and positive impact, financial development structure had always showed remarkable and negative impact, and the impact of financial development efficiency had always been unremarkable.The quantitative estimations of the impact show that, the impact of financial development scale on space urbanization was the largest, the impact of financial development scale on people urbanization was the second, and the impact of financial development scale on industry urbanization was the smallest. The impact of financial development structure on people urbanization was the largest, the impact of financial development structure on space urbanization was the second, and the impact of financial development structure on industry urbanization was the smallest. The impacts of financial development efficiency on people urbanization, industry urbanization and space urbanization were tiny.In the part of mechanism and application research, the author analyzes function mechanism and practical application of the impact of financial development on urbanization deeply, and puts forward that capital supply and allocation are the core of the mechanism. The former mainly uses the conversion mechanism between saving and investment to strengthen capital supply. The latter mainly enhances capital efficiency through capital flow and optional allocation in various fields. In the aspect of people urbanization, taking human capital as the core, the author analyzes the mechanism, application fields and support routes of the impact of financial on population migration. In the aspect of industry urbanization, taking industrial structure as the core, the author researches the mechanism, application fields and support routes of the impacts of financial on industrial structure’s rationalization and optimization. In the aspect of space urbanization, taking space conglomeration effect as the core, the author analyzes the mechanism, application fields and support routes of the impacts of financial on big cities development and city groups development.In the part of countermeasure research, from four aspects of reform and innovation of system, population migration, optimization and upgrading of industrial structure, construction and development of city system, the author puts forward some countermeasures and suggestions for financial support for new-type urbanization construction in China.