Regional Differences In Illegal Fund-raising And Its Influencing Factors

Since 2011, illegal fund-raising cases have occurred in different regions. Because of the high risk of private lending, a time of private capital at risk, the region has a large-scale private lending crisis. Further may lead to the collapse of the whole system of private lending. A large number of small and medium enterprises closed down and business owners foot incident continues to occur. Illegal fund-raising events are also concentrated. This seriously impacts on China’s economic development. To study the causes of these events is the important prerequisite to deal with the crisis. The emergence of illegal fund-raising is based on private lending is not perfect. Criminals use the lack of private lending, engaged in financial activities, but the final return of interest or even unable to return the principal. Therefore, the study of the regional differences in illegal fund-raising can be the first to study the basis of whether there are regional differences in private lending.First of all, this paper analyzes the characteristics of the different regions of private lending through the reading of literature, summarized some characteristics of the impact of private lending. The occurrence of illegal fund-raising is dependent on the development of private lending. Therefore, some of the regional characteristics of private lending or malpractice have led to the emergence of some of the relevant characteristics of illegal fund-raising. These characteristics affect the distribution of illegal fund-raising in the region.Secondly, this article collects 832 cases of illegal fund-raising through the "Chinese referee instruments net", "110 network" and other network channels.Classify these cases, including the place of occurrence of the case, the case of the main gender, age, culture level and the amount of money involved. We compare the cases from three different regions of eastern, central and western, summarizing the characteristics of the cases of each region. Through comparing the economy of the place which the case take place and the microscopic characteristics of these cases, 293 cases of each feature are selected. After that, the gender, age, culture level and the case amount of the subjects involved in the different regions were counted. It is found that the distribution of the number of these cases is related to the other variables.The regression results show that the province’s GDP has a significantly negativecorrelation with the amount of illegal fund-raising, and that the province’s financial ecology has a significantly positive correlation with the amount of illegal fund-raising.And the province’s market index has a case of U type correlation with the amount of illegal fund-raising. It’s means that one area with high GDP will take place small amount of illegal fund-raising and with good financial ecology will take place big amount of illegal fund-raising. There is a suitable market index, with which one area will take place the minimum amount of illegal fund-raising.The regression results also show that the variable of gender of the crime are all has a significantly negative correlation with the amount of illegal fund-raising, and that the education level of the subject of the crime has a significantly positive correlation with the amount of illegal fund-raising. And the age of the subject of the crime has a case of inverted U type correlation with the amount of illegal fund-raising.It’s means that a person has a higher education level can get bigger amount of illegal fund-raising. Women can be shown more advantageous information than men in illegal fund-raising cases. Young adults more easily get money from people in illegal fund-raising cases.Using SHARP value method, explain the specific impact of the various variables on the amount of illegal fund-raising. We use Lorenz coefficient to measure the gap between the samples and take the coefficient as the index to measure the degree of contribution of each variable to the extent of the amount of money involved in the case. The results show that the role of regional economic variables in the case of illegal fund-raising is more important than the individual characteristics of the subject.The regression method and the decomposition method were used respectively in the eastern and western regions. Differences in the amount of illegal fund-raising in the eastern region, the influence of economy is greater than that of the impact of the western region. The influence of the main features in the central and western regions is greater than the effect of the amount of illegal fund-raising in the region is greater than that of the eastern region.Finally, this paper summarizes the results of empirical analysis of the possible reasons for this result. The economy of the eastern and western regions is obviously different. Investment methods are also very different, including type and quantity.Therefore, in the process of investment, the choices of private lending and the choices of the direction are obviously different. The development of illegal fund-raising is inseparable from the development of private lending. So the factors that affect privatelending can also lead to the difference in the amount of illegal fund-raising.