Impact Of Regional Financial Mechanisms And Inherent Differences In Form

Regional economic development differences is a common phenomenon in most countries in the process of economic development, and regional differences, however, more than a certain extent, will lead to a series of questions of the political, economic, social, thereby affecting the social stability and development. Finance, as the core of modern economy, will no doubt become an important factor in the impact of regional economic differences. Nearly thirty five years, it is quite sure that the imbalance of progress of Chinese region economy is largely due to the level of difference of the financial development. The government of the eastern coastal areas has always made east the swift and violent development, substantial inflow of funds into the eastern region. Over the past decade, the government began to pay attention to the problem of China’s eastern, central and western regional economic differences, and the government introduced the" western big development" of western region, and the western region’s economic development has been increased rapidly. While the central economy is in the awkward geography location, the middle area developed slowly, due to the Geographic location of the area between the economic and financial development gap. Western big development made western area’s developed rapidly, but the actual capital utilization rate is not high, and a large amount of money do not make use to the western construction. And a large amount of capital flow from the West into the eastern region. In the financial developed area, the region’s economic growth was faster and better financial support, but in the backward area, the financial development is just the opposite. First, we build indicators system to measure differences in the level of regional financial, respectively, starting from the overall and two dimensions of different industries, to analyze the financial scale of the eastern, central and western region, the degree of financial deepening, financial structure, and financial risk level. We concluded that the difference of China’s regional financial development level is expanding, and total difference of the regional financial is conspicuous.Since the nineteen nineties, many scholars in China regional financial development research has been the emergence of a large number of theoretical articles, but the empirical evidence is insufficient, own research mostly only to individual areas within the description and comparison with other areas, while most of the research is from within each region’s financial development and economic growth beginning with the relationship, not related to the regional financial differences between intrinsic formation mechanism, the method used is the only traditional data descriptive comparison and cluster analysis. Therefore, based on the analysis of regional financial issues, both the overall point of view, and also local point of view, China is divided into two areas of East and West, and to the provincial data as the basis, to analyze the problem of China’s regional financial differences.This paper builds up a Three Regional Asymmetric FC Model with the spatial economy theory; do research on the regional financial differences between intrinsic formations mechanisms from a theoretical point of view. The theoretical model shows that:for the natural geographical advantages of the eastern coastal areas, a large number of that capital flows to the eastern region, and the economic development of the eastern region has improved rapidly. There are differences of the level of financial development between the eastern regions and the western regions. With the freer trade between the eastern and western as well as the freer trade between the east and the foreign improving, the financial capital of the Midwest outflow, also accompanied the weakness of Midwest’s industrial. With the improvement of freer trade, the central and western regions will gradually become the "industrial desert", then overseas. When the freer trade is free enough, capital will flow to the east. In addition, due to the local market zoom effect, changes in the local share of expenditures will lead to the change of a greater proportion of the share of local industry. It is also means that the gathering of financial capital in the region has a multiplier effect. Due to the amplification effect the local market, the gap between the eastern and the level of financial development will increase with the expansion of the eastern and capital endowments; and the increasing gap will speed up with the increasing freer trade.Through empirical analysis of panel data model, this paper shows that the increased of regional financial difference aggregate the difference of region economy. The government of the eastern, central and western should develop different financial policies, and should put forward to different policy recommendations for regional financial development in the supporting policies proposed institutional arrangements: introducing a regional monetary policy; relaxing the restrictions on access to private capital of the central and western regions; developing specialized financial institutions and encouraging financial innovation; encouraging the eastern capital to flow to Midwest region; implying differentiated tax policies and regional policy adjustments of transfer payments. This paper offers constructive opinion. to realize the harmonious development of region. In addition, this paper constructs the mathematical model of spatial economics methods applied in regional financial theory research, and provides a good idea to Chinese area difference problem.