Research On Externality Of Network Finance

It's undoubted that the emergence of Internet era will extensively and profoundly influences the current system of economy and society. So, the research on the impact of Network Finance on the modern economy is necessary and meaningful. The gap between China's traditional finance and those of developed countries is large. However, the Network Finance avails us opportunity to narrow the gap in a short term. The industry of finance that is centered on by the modern economy suffers the severe and obvious shock from the era of Network Economy. On the one hand, the socialization of information, globalization of financial resource distribution, individuation of customer's demand, homogeneity of financial industry, non-intermediation of financial institutes brought by the development of Network Economy deeply changed the circumstance of finance. On the other hand, the development and implication of IT accelerate the innovation of finance. Pushed by the joint force, many changes took place in the financial industry. Among those changes, people pay much attention to the externality displayed in this Network Financial circumstance. We are quite familiar with the externality in the traditional term as well as the solution of them, but the externality of Network Finance has its own characteristics. In conclusion, Network Financial Externality is the external economic effect on the tertiary side, which is imposed by the private cost or private income. Thanks to the specialties of the financial market, the externality displayed in the circumstance of network finance is different from the network externality in the traditional term. The network financial externality includes not only positive effect, but also negative effect, which both represent the failure of the financial market and will surely impair the Pareto's Efficiency of financial resources. The article focus on the analysis of unique externality of network finance in various aspects, then build the primary model in order to test the influence of some conditions of the market of network finance. The Network Finance circumstance (market) is in the initial stage. Even some developed countries have many barriers in the development process. Therefore, we should push forward the research on the network financial externality...