Regional Financial Development Disparity Study

Since the reform and opening up, although our economy has achieved a great development, but the widening gap in regional development and non-equilibrium problem have become important factors to affect our current economic and constraint the development of social harmony. In a large part, the operation of the regional economy depends in the promotion and adjustment of the financial. If the regional imbalance is arise in the course of financial operation, it will further aggravate the imbalance of regional economic development. Therefore, studying and exploring the issue of China's regional differences in financial development has an very vital practical significance, which could reduce the regional economic disparities and promote regional coordinated development.From the perspective of China's administrative regions, namely, eastern, central, and western regions, this article firstly constructs the comprehensive index to measure up the regional financial development from the three aspects of the total amount of financial development, the financial developed structure and the efficiency of financial development, and reveals the status of differences in regional financial development, and discusses a variety of factors that impact the financial development in the eastern, central, and western regions, including economic factor, monetary policy factor and new economic geography factor. And then using the mix estimate model to carry on the quantitative inspection, and analyze various factors on the different areas produced different effects. Then using the biodegradable nature of Theil index to study the the changes in financial trends in the regional development, the result shows that the financial gap in our country in the 30 years emerge the U-changing that narrowing firstly and then expanding, the contribution of the inward regional differences towards the total divergence is the greatest. Finally, proposing the policy recommendations of narrowing the difference between China's regional financial development based on the results of empirical analysis. This paper suggests that the government should optimize the regional financial architecture, implement the regionalized monetary policy, enhance the degree of backward areas of the market, provide a good external environment for the financial development, in order to close the gap.