Regional Financial Development Disparity Measure And Its Influencing Factors

Economic disparities among Chinese regions were long-standing phenomenon, which grew in intensity especially during the past ten years. Since finance is at the core of a nation's economy, the regional disparity leads to discrepancies in regional finance. This paper studies the measurement, as well as causations of regional difference in financial field in Chinese, through empirical and theoretical analysis.On the basis of Financial Development Theory and Financial Geography Theory, the paper conducts an intensive review focusing on regional financial disparities.Chapter Three gives a description on the actuality of financial development in China. After a brief review of the reform in financial market in China during the past 30 years, the paper then make comparisons of regional disparities in aspects like market scale and trade volume of Banking and Securities markets.Then, by constructing a comprehensive financial development index which covers 3 major financial sectors including banking, securities and insurance, the paper conducts empirical study, with data from provincial administrative areas of 2005. The result shows substantial financial development disparities across regions.In Chapter Five, the paper studies major causations of regional difference in Chinese financial development through empirical analysis. Using panel data of 11 provinces of Eastern China, the paper tests the relationship between financial development and these influential factors. The result shows that these factors, including factors frequently considered in New Economic Geography and several policy indicators do substantial influences to regional financial development.Finally, the paper raises several policy implications based on the result in the previous chapters.