Study On The Regional Differences Of Financial Agglomeration And Economic Growth

Since carrying out our country’s reform and opening-up policy in1978, China’s economic development has made great progress, but also formed a larger difference in regional economic development, and this gap has the trend of widening. The manifestation of the differences in our country as follows: one side is the eastern coastal areas of economic developed and prosperity, the other side is the central and western regions of economic developing relatively backward; one side is the perfect market economy in the eastern region, the other side is that the planned economy still occupied an important position in the western region; one side is higher urbanization rate in the east, the other side is the more backward rural in the western region. The causes of the regional differences mainly have two kinds, one is due to natural causes of different geographical location and resource endowment, another is our country’s different regional policy oriented and open policy lead to.The specific reasons for this difference, many scholars have a heated discussion and research, however, a country’s development cannot development without finance, which is the key factor we are focusing on in the economic development. In the modern economy, finance is the core of the economy, so the financial development will have a crucial effect on the economic growth. Through summing up and comparative literature, using the provincial panel data, establishing the panel model, unit root test, cointegration test and empirical analysis, draw the following conclusions:(1)By combing the domestic and foreign related research, many scholars have theoretical studied on the relationship of financial agglomeration and economic growth, but the empirical analysis are less, and it has not formed a unified theoretical framework. Therefore, this paper select the provincial panel data, from the national level and regional level to demonstrate the relationship of financial agglomeration and economic growth, and then the regional differences among them.(2)Through the situation analysis of financial agglomeration and economic growth in China, we found that financial agglomeration and economic growth are the trend on the whole, and there also are regional differences. Financial agglomeration is towards regional balanced developing on the whole, which has lots to do with our country’s series policy of narrowing the difference regional development, and the effect is gradually apparent. From the comparison of regional financial agglomeration level, the concentration of eastern region is highest, and then the central and western regions. About the economic growth, our country’s economy is always sustained and rapid developing, though they a big regional difference, on the whole have a narrowing trend. So we think that the financial agglomeration and economic growth have a certain relationship.(3)Through the analysis of the theories and the status, and the empirical analysis of panel data, the conclusion is that the financial agglomeration has significant positive effect on the economic growth. Financial agglomeration in different regions is different, then promotes economic growth differently. Look from the province level, the finance concentrated more higher in the area, its economic development move better and more faster, and vice versa; From the regional perspective, the financial agglomeration of eastern region is the highest, so the effect of promoting economic growth is the strongest. While the promotion of finance agglomeration to economic growth is reduce gradually in the central and western regions, and the promotion is in accord with the degree of financial agglomeration in the area. Finally we can work out that, the financial agglomeration can be effective in promoting economic growth, and economic growth can also aggravate the financial agglomeration, which interact with each other, the more developed the economy, the higher agglomeration the finance, the higher the financial agglomeration, the faster the economic growth. However, through the empirical analysis, we can know that capital, human input have absolutely significant role in promoting economic growth, while the financial agglomeration has not become the dominant factors to promote economic growth, therefore, we should suit one’s measures to local conditions, focus not all the notes on financial agglomeration and ignore other factors which affect economic growth. In addition, we also need to be based on the actual situation, carries on the support and development of the city, economic opening, science and technology innovation and the third industry, if make effective control and guidance to these, they can have a certain role in promoting economic growth.Based on the above research conclusion, combined with China’s regional development strategy and policy, this paper argues that to promote regional economic coordination equilibrium, sound and rapid development, we need do from the following aspects:(1)The governments at all levels should strengthen policy support, cooperation to promote development. Because our country has special economic and cultural background, a lot of financial agglomeration or financial center is exogenous of the policy. Therefore, various financial policies made by government play an important role in the formation of financial center. First, the central government who has the dominant position decisive in policy making, need to advance the vision, with the actual situation, formulate and improve the relevant system, follow the footsteps of the world, norm development of the domestic financial market, enhance the industry’s ability of resisting risk. Second, the local government, which as the executor and supplement of the central government laws, hot only need to Coordination the central government initiatives, but also to strengthen the self construction of local financial system, to establish and perfect financial laws and regulations, to encourage and attract investment. Finally, we need strengthen the cooperation and exchange between central government and local government. Full communication and cooperation between them, support each other and collaboration, then promote the economic development in balance among various areas.(2)Make clear the financial function orientation, promoting financial agglomeration effect. We know from the empirical analysis that financial agglomeration can significantly promote economic growth. We should be fully aware of the financial function, position clearly, suit one’s measures to local conditions to maximize the role of financial agglomeration. On the one hand, we should give full play to the financial services function through the real economy, building a regional financial center, integration system of regional financial organizations, to construct the complementary organization network of financial agglomeration. On the other hand, we should speed up exchanges among regional financial information, build a financial information service system platform, so that financial information can effectively reach to underdeveloped economy and financial resource poor regions, then realize the linkage development of regional finance, so as to enhance the ability of radiation and linkage effect of financial agglomeration.(3) Judging the economic development stage, select the appropriate financial agglomeration mode and type. Through the status analysis and the international comparison, and empirical analysis with the real data, we know that the stage of economic development should be consistent with financial development model to better promote economic growth. We must act according to the different levels of economic development to play financial agglomeration structure and types to adopt to it, strengthen the infiltration of the finance to the economy, and promote economic growth. For example in view of the relatively developed eastern areas, we need develop the demand caused financial agglomeration; while to the relatively underdeveloped central and western regions, we need develop the supply guidance financial agglomeration.(4) Vigorously develop the economy, create a good financial environment, pay attention to the various coordinated development. Every financial center is the economic center in the world. Who want to become a financial center, it must have strong economic strength. Only the economic develop well, it could promote the financial market to develop well, and continuously strengthen the financial agglomeration degree. In addition, governments at all levels should cultivate a good financial ecological environment, strengthen macro-control of the finance, and through industrial policy to actively promote the financial agglomeration. At the same times, governments should also be coordinated with other regional governments, to achieve financial agglomeration integration.