The Analysis Of The Status And The Reasons Of Regional Financial Discrepancies

There are big differences in regional economy, social and culture development inChina, and compared with the economy, the regional finance development is moreun-balanced among the33provinces. Such kind of unbalance will deepen the economicgap among the provinces. If the vicious circle has happened, it would cause social conflictand hinder the social harmonious. In order to make some helpful advice to reduce thedisparities and promote harmonious among the regions, this paper studies the regionaleconomy by unilateral index and comprehensive indexes, and try to find the reasons ofthe regional disparities by linear regression from the angle of financial internal andexternal security.This thesis describe current financial situation and the regional disparities from4perspectives: financial scale, financial structure, financial efficiency, financial institution,and then constructs a comprehensive index to measure the financial development by usingfactor analysis. By analyzing FIR, FS, FE, FI and the comprehensive index, we found thatalthough the eastern region’s finance is the most developed among the four regions, thedisparities of the eastern provinces are the most significant as well. And the gap of theother3regions are not so deep as it supposed to be, the western region is even better insome indexes. That’s probably because of the Western development strategy and thelimitation of the GDP in the west.Then we use typical linear regression analysis to find out the reason cause thefinancial disparities. We found that the economy development, capital-output ratio,financial liberalization and act of government are the most significant factors that affect thefinancial disparities. But the openness to the outside world and the interest rate are notsignificant to the regional financial disparities, which means the regional financial transfermechanisms isn’t mature.At the end of the paper, we provide relevant policy advice according the previousdemonstration that the government should take some proper part in economy, promote thenongovernmental finance development, promote the establishment of the regionalfinancial transfer mechanisms.