The Research On The Efficiency Of The Financial Agglomeration To Promote Technology Innovation

Financial agglomeration has become a significant phenomenon in the process offinancial development, like the Financial Street in Beijing and Shanghai’s Pudongfinancial district are typical of financial agglomeration areas.The financialagglomeration development experience in western developed countries has shown thatfinancial agglomeration of a region can effectively promote local technologicalinnovation activities, thus contributing to social and economic development. AlthoughChina’s financial market is becoming mature and also has formed a certain scale offinancial agglomeration area, but there are still many problems that need to beaddressed in terms of the overall layout of financial resources and the construction offinancial center, so there are limits to the role of supporting technologicalinnovation.The study of China’s urban financial agglomeration and its support fortechnological innovation will help to study the problems of financial agglomerationand technological innovation, and be of great theoretical value for making financialand economic development policies to enhance the capability of China’s independentinnovation and promote healthy economic development. View of this, based on theformer’ research, this paper explores the mechanism of the financial gatheringaction to promote technological innovation and calculates the total factor productivityof China’s financial agglomeration to promote technological innovation and itsinfluencing factors in the empirical analysis,then put forward relevant policies.Based on panel data from2005to2009of China’s25provincial capital cities,thispaper uses non-parametric Malmquist productivity index of the DEA model toestimate the total factor productivity of China’s financial gathering to promotetechnological innovation, the results show that total factor productivity is overallrising. And then we use the model to test the determinants of the TFP. The resultsshow that the banking industry has positive effect on the total factor productivity offinancial gathering promoting technological innovation,while the effect of theinsurance industry to promote the total factor productivity is not obvious. Finally, onthe basis of the empirical results, this paper offers some suggestions about thedevelopment of financial agglomeration: breaking the barriers between the varioussectors and regions to create a financial agglomeration interaction mechanism;continuously improving the market level of the financial sector, the establishment of standardized and transparent financial management system and so on.