Study On The Effect Of The Financial Services Cluster Stimulating Regional Economic Growth

Ⅰ. Research Background and PurposeThe process of globalization has been accelerating during the past several decades, however it has to be noted that the globalization of production capacities has failed to distribute these capacities evenly from a geographical perspective. On the contrary, the agglomeration effect related to the geographical distribution of production activities is becoming more and more obvious. Thus in many countries, a new organizational type has emerged during the process of industrialization industrial cluster. This new type of organization has already become an important force of economic development, both in developed and developing countries. Ever since1970s, the concept of’industrial cluster’has been successfully applied to the field of finance. From several banks to the emergence of various finance holding companies, all kinds of different financial institutions has been agglomerated and business process has been outsourced till now, the concept of financial services cluster is becoming more and more important to all economies. In China, with the rapid development of the financial services industry, the agglomeration effect of the financial institutions is also quite obvious. Typical examples include:Shanghai, Beijing and Shenzhen. With the increasing development of information technology and communication systems, financial services clusters attract dense economic energy like’sticky places in slippery space’. Through agglomeration effect, economies of scale and information spillover effect etc., financial services clusters have contributed greatly to the development of local economies, and have become one of the main forces to promote regional economic competitiveness. Therefore,’financial services cluster’is now an essential topic in the field of financial research, and is also the new spotlight in the study of industrial clusters.The relationship between financial market development and economic growth is one of the core areas in modern economics research. In addition, when it comes to the level of regional development, the relationship between financial services cluster and regional economic growth appears to be even more important. The purpose of this paper is to study the agglomeration effect of financial services cluster on regional economic growth, through the adoption of the theory of modern applied economics and the research methodology of econometrics. From the perspective of theory and experience,this paper will apply theories on several economic regions in China, and will provide references for those who want to study further on this area.Ⅱ. Structure and FrameworkBased on agglomeration effect, this paper will seek to find out the way how financial services clusters can stimulate regional economic growth in the context of practical scenarios. This paper consists of six chapters.Main contents of the respective chapters are explained as follows:Chapter1, Introduction. In this section, the overall research background, research purposes, research approach, and research methodology will be explained. In addition, originality of this paper and the limitations of the research techniques applied will be discussed.Chapter2, Literature Review. At the beginning of this chapter, delimitation will be made to several basic concepts, which include’industrial cluster’,’financial services cluster’and’financial center’. Subsequently summarized will be the differences between industrial cluster and manufacturing cluster, and a brief description regarding the relationship between financial services cluster and financial center. Then on the basis of relevant materials, this paper will seek to summarize the various drivers of constructing a financial services cluster on both macro and micro levels. The following will be a summarization of the results of the studies on financial services cluster and financial centers which were conducted by researchers in China. Finally, a detailed presentation will be made regarding the theories about how financial services cluster can stimulate regional economic growth and the main opinions of existing materials from4aspects, which are respectively the relationship between financial service development and economic growth, the general effect of the impact of financial services cluster on economic growth, the effect that financial services cluster stimulate regional economic growth, and the effect that financial services cluster contribute to the upgrade of industrial structure. Through detailed summarization and classification. we found that in China, majority of the researches about financial services cluster have been focusing on qualitative elements. Few are based on the empirical analysis of systematization and modeling. It gives direction to our further research.Chapter3, Formation Mechanism and Elements of Financial Industry Cluster. This chapter discusses the formation mechanism of financial services cluster based on4parts, which include the dynamic mechanism of the formation of financial services cluster, the two routes to (demand-responded and supply-oriented) the formation of financial services cluster, basic elements to form a financial services cluster, and the mechanism of competition in the formation of financial services cluster.Chapter4, the Comparison Analysis of the Financial Services Cluster in the Three Main Economic Zones in China. In light of the new pattern of global financial industry, this chapter firstly analyzes the status quo of the development of China’s financial services cluster. In-depth comparisons of the Shanghai financial services cluster, the Beijing financial services cluster and the Shenzhen financial services cluster will be conducted. Finally a comparative analysis will be made regarding the positioning, routes of formation and overall competitiveness of the three financial services clusters.Chapter5, Empirical Research on the Effect of Financial Services Cluster Stimulating Regional Economic Growth. This chapter begins with the construction of the evaluation system which assesses the competitiveness of a regional financial services cluster. Then through the adoption of principal component analysis, and using the2003-2010index data of31provinces, autonomous regions and municipalities as research sample, the index for evaluating the competitiveness of the various financial services clusters in different regions in China has been calculated. Then based on the calculated index which will later be used as production factors, we have managed to construct a model which connects the index with the services industry. This is to examine the impact of a financial services cluster on regional economic growth. Finally, after the introduction of the gravity model which assesses the strength of the economic connections among different cities, taking the Yangtze River Economic Zone as research sample, this paper further explores how the Shanghai financial services cluster promotes regional economic growth. This result shows that the promotion effect is quite obvious, and when the closer a city’s connection with Shanghai is, the more obvious the effect is.Chapter6, Building Chengdu Regional Financial Services Cluster to Promote the Development of Chengdu-Chongqing Economic Zone. This chapter firstly describes the overall status of the financial industry in Chengdu, and then uses SWOT analysis to conduct a comprehensive analysis regarding the establishment a regional financial services cluster in Chengdu. Further a suggestion in terms of the basic idea and measures as to how to establish a financial services cluster in Chengdu will be given. At the end of this chapter, based on the establishment of the Chengdu-Chongqing Economic Zone, exploration will be made regarding how to promote the development of the Chengdu-Chongqing Economic Zone by promoting the integration of the two financial services clusters in Chengdu and Chongqing, thus making it the fourth growth pole after China’s Yangtze River Economic Zone, Pearl River Economic Zone and Central Economic Zone.Ⅲ. Main Innovation and Contributions of this Paper.1. Innovation of the perspective of the research. Firstly, from a theoretical point of view, researches about industrial clusters have always been focusing on manufacturers, high-tech businesses and SMEs. The researches of financial services cluster have been very limited. However, financial services cluster has already become one very important organization type in the finance sector. Secondly, the relationships between finance and economic growth have been ignored by many researches on agglomeration effect. Based on the viewpoint of financial services clusters, this paper has managed to discuss and evaluate the effect that regional financial services promote regional economic growth.2. This paper seeks to compare and analyze the features of the3main regional economic zones and their respective financial services clusters. Till present, there are3main financial services clusters which are based on Shanghai, Shenzhen and Beijing respectively. This paper has not only analyzed their current development pattern in detail, but also has compared their positions, pattern of formation and competitiveness. In addition, from an alternative point of view, we have successfully proved the positive promotion effect of the connections between financial services cluster and regional economic growth. 3. Current studies of financial services clusters have been focusing on qualitative research and compliance research. This paper however has managed to study this topic from a quantitative perspective. Based on the foundation of other researcher’s achievements, this paper has managed to construct a more systematic and comprehensive evaluation system which assesses the competitiveness of different financial clusters from different regions. Using the2003-2010index data of the country’s31provinces, autonomous regions and municipalities as research sample, the index for evaluating the competitiveness of the various financial services cluster in different regions in China has been calculated. Based on the calculations, the paper has successfully verified the promotion effect of financial services cluster to a regional economy.4. In the view of study on Chengdu-Chongqing Economic Zone, many researchers who have studied this topic focus on real economy based on the theory of industrial structure coordination, and few have looked into the construction of Chengdu-Chongqing Economic Zone from a perspective of financial cooperation. The research conducted in this paper has proved that financial services cluster can stimulate regional economic growth from both a theoretical and an empirical perspective. Hence taking our base city Chengdu into consideration, we have made several opinions regarding establishing regional financial services cluster and promoting Chengdu-Chongqing Economic Zone. Due to the similarities of Chengdu and Chongqing in many aspects, it is suggested that the two cities should cooperate with each other by integrating economic and financial resources, in order to construct an interactive and complex southwestern financial services cluster.