| In modern economic activities,finance is the core,and it plays a key role to theeconomic development. It is not only important in transforming savings intoinvestment, it is also difficult being substituted by others in risk management andsolve moral hazard problems which due to the Asymmetric information. Therefore,financial decides the scope and the performance of the real economy, and plays animportant role in shaping the space patterns of economic activity. Since Raymond w.goldsmith (1969), the development of literature in financial and development hassubstantially improved people’s understanding in relationship between finance andgrowth.Now, it is basically become a consensus that financial has important effect toeconomy. However,in the existing literature, the space factor in the financial andeconomic activities has been ignored。Even if the study about the relationship betweenregional finance and regional economic growth are mostly do time series analysisabout all aspects of financial development, which is a kind of static analysis, notinvolved in the dynamic process of regional financial growth effects on regionaleconomic growth. Either from the perspective of the world or from the domesticvarious regions in China, the distribution of financial resources is very unequal,theedge area and the core area of financial coexistence. From static view, global has aglobal financial centers such as London, New York, Tokyo, and domestic has financialagglomeration area such as the Beijing financial street and Shanghai lujiazui. Fromdynamic view, each region or city financial development speed also has a largerdifference, reflected in the financial incremental or financial value has a big disparitygap, which reflects on differences of speed on financial innovation, new productdevelopment and design of the new financial system, financial market trading volume,etc., and the rhythm of regional financial resources flow also is not the same.on the other hand, since the Paul krugman’s (1991) famous paper, the rise ofNew Economic Geography(NEG) has substantially improved people’s understanding of the determinants of agglomeration and welfare consequences,which explain spatialdistribution of Economic activities based on increasing returns, monopolisticcompetition and space flow of production factors. Now, new economic geography hasbecome an important part of mainstream economics as it build up the generalequilibrium framework to understanding spatial distribution of economic activity. Inthe literature on new economic geography, however, the most important problem thatthe role of financial agglomeration in shaping economic activity has not causedenough attention.In view of this, to study the dynamic mechanism of financial agglomeration andthe ways and mechanism of promoting regional economic growth not only hasimportant theory value, but also has very important practical significance.This article explore financial gains momentum from the financial endogenousdevelopment mechanism as well as the regional financial development geographysecondary angles, view the role of finance in a modern economy from the perspectiveof financial function, thereby, view finance as a kind of important economic resources,and more directly, is a production factors of production enterprise, study the dynamicmechanism of financial agglomeration and the ways and mechanism of promotingregional economic growth under the framework of new economic geography.Finally,using the provincial panel data in our country to do empirical research whichbased on the FNEG model that builded in the article.According to the FNEG model and the empirical research, this paper get thefollowing basic conclusions and enlightenments.(1) The growth of regional financial resources depends on the regional financialopenness, openness to trade, labor force in the region,industrial production spendingand the elasticity of substitution of the product.(2) The growth of financial resources within the region promoting the regionaleconomic growth, so regional economic growth also depends on regional financialopenness, openness to trade, labor force in the region,industrial production spendingand the elasticity of substitution of the product.(3) Regional financial resources possession gap result in income and welfare gap between areas.(4) Economic growth and agglomeration degree are linked. The agglomeration ofresources leads to industrial concentration, and the higher of the concentration degree,the faster the economic growth.(5) Compared with the area which has a higher degree of agglomeration,area,which has a lower degree of agglomeration, has more close relations betweeneconomic growth and openness of economic and financial, improve the openness ofeconomic and financial openness may be more conducive to speed up the economicgrowth. |
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