The Spatial Econometric Analysis Of The Impact Of Financial Agglomeration On Economic Growth In Three Gorges Reservoir

The resettlement of millions reservoir immigrants depends on the development of the Three Gorges Reservoir Area. The financial and economic development plays an important role in promoting the smooth operation of this area and living a happy life for the immigrants.Since China’s reform and opening up,the government’s attention all over the country has been paid on financial development and the promotion made by the product of financial agglomeration-financial center to economic development.With the macro background of transforming the mode of economic growth for economic transition currently,the way of economic development through financial development has been an important new model. From the perspective of the situation of the domestic financial industry development, the regional distribution of financial resources is uneven,which is caused by the dynamic agglomeration and dispersion of financial resources. Combined with the influence of economic globalization, there is important significance on analyzing the process of financial agglomeration and its effects on China’s financial center planning.With the view of related literature about domestic and foreign financial agglomeration and its effects on economic growth, we can find that although the current study is very comprehensive, but there are some problems: 1, The Existing literature always target on the empirical study of the relationship between financial agglomeration and economic growth,while analysis of the mechanism of inner relationship of the promotion has been ignored.2, Existing studies always focus on the the impact of financial agglomeration on economic development in the core area of financial agglomeration(the local area), which as a result the influence on the surrounding areas has been ignored.This kind of research that ignore the geography relations and differences of finance is always lack of practicality.3, The current study attaches great importance to the long-term effects of financial agglomeration on economic growth, and ignores the “polarization effect”as well as “squeezing effect”caused by financial agglomeration on economic growth in short time.Based on the above findings and thinking, this article makes a relevant improvement: 1, We try to explain the inner mechanism of the influence of financial agglomeration on economic development from multiple angles of financial function and the macroeconomic effects of financial agglomeration deeply.2,Adopting the theories and methods of spatial economics,we establish spatial econometric model to explore the agglomeration effect and diffusion effect made by financial agglomeration on economic growth.3,We try to explain the “polarization effect” and “squeezing effect”produced in short time by financial agglomeration. In the empirical research,we firstly demonstrates the exists of the spatial correlation of financial agglomeration and economic growth around each district of the research areas by Moran I index and Moran scatter diagram.Secondly we build the spatial lag model and spatial error model to estimate the space impact on economic growth caused by four explanatory variables such as financial agglomeration, capital input, labor input, the degree of the opening up.Finally we found three conclusions: First,the level of financial agglomeration in the area of this paper is low. The coefficient of financial agglomeration to economic growth is big enough,which means that the effect on economic growth by financial agglomeration is obvious and the governments should promote the development of the financial agglomeration so that the financial agglomeration can play a good role in promoting economic growth. Second,the influence of capital investments and opening up on economic growth were significantly positive,which means that the highest efficiency various factor that results in the economic growth is opening up among four various factors during the current period. The governments should steadily increase capital investments and the degree of opening up while expanding foreign trades and foreign investments. Third, labor input variable has a negative impact on economic growth and it’s significance is not high.The reason may be the diminishing marginal returns of labour caused by the labor surplus in studying areas.This means that simple labour quantity may has few effects on economic growth or even has an adverse effect in studying areas at this time.So the governments should adjust the industrial structure and develop the labor-intensive industries with the advantage of abundant labour in case of diminishing marginal returns of labor.