Financial Aggregation Effect In The Industrial Aggregation Process - Model And Demonstration Study

Modern world is globalized and informationalized, the development of information technology promote the financial industry in the progress of globalization, financial industry has become a crucial part of the world-wide economy, the development of mobility of financial assets and financial industrial agglomeration are unprecedented. Interaction financial industrial agglomeration and economic evolution in the same country or region have created a well-developed pattern, any country or region who wants to amplify its power of competing with other countries or regions has to highlight the financial industrial agglomeration. Thus, financial industrial agglomeration has become a popular topic. However, as for underdeveloped countries and regions, the evolution progress of their economies show little significant regular pattern, this situation brings difficult for the research. Hence, this paper, with underdeveloped regions as the study objects, tries to find the reasons that cause the underdevelopment in these regions.Firstly, the research in this paper takes Financial industrial agglomeration as kernel, analysis the connotations, meanings and characters of Financial industrial agglomeration, using the research outcome in existence. Secondly, this paper describes the inherent reasons of financial industrial agglomeration, effects of financial industrial agglomeration on real economy, elements which affect financial industrial agglomeration, the formation of regional financial center, and government's function. Lastly, this paper takes GuiZhou province in western China as an example to empirically analyzes the effect of financial industrial agglomeration. Because of the underdevelopment of Gui Zhou's economy, there may be many haphazard elements that affect development of economy, so this paper solely considers some basic indicators, including deposits of financial institutions, loans of financial institutions, cash expenses of financial institutions, number of financial institutions, number of employees of financial institutions, Savings balance of urban and rural residents, and premium income. Finance concentration index is obtained according to these indicators, and a linear regression model of normalized GDP is constructed, with finance concentration index as the only explanatory variable, to analyze the relationship between financial industrial agglomeration and economic growth. Another linear regression model of finance concentration index is constructed,the explanatory variables in this model are disposable income, total import and export, total export, total import, per capita revenue, total retail sales of social consumer goods. Because of multicollinearity, the results of this model show no significance in the coefficients, after ruling out two indicators which are highly related with another indicator, results of the new model are significant, that is, these economic indicators have significant effect on financial industrial agglomeration. In the last section of this paper, some suggestions are proposed to government.