Study On The Relationship Between Financial Agglomeration And Economic Growth

With the rapid development of economic globalization and networkcommunication technology, as the core of modern economy, finance is playing a moreand more important role in economic growth. Under the combined action of industrycluster, economy financialization, scale economy, information asymmetry andfinancial high liquidity, financial agglomeration appears in many regions at home andabroad to varying degrees, and even becomes financial growth pole, financial center.They produced agglomeration effect, diffusion effect and functional effect oneconomic growth. In developed area, along with the development of the financialindustrial agglomeration, financial industry gradually develops to be the core ofeconomic activity from traditional industries’ attendant industry.Hunan province is one of the important members of the central China’s risingstrategy. Its economy and finance have acquired rapid development. What’s the statusof its financial development and agglomeration? What’s the relationship betweenfinancial agglomeration and economic growth? How to improve the level of financialdevelopment and agglomeration? How to bring financial agglomeration effect intoplay, so as to promote financial development and economic development, reduceregional economic and financial development’s differences?The research target of this paper is trying to solve above problems. On the basisof referring to domestic and foreign research results, it tries to further elaborate therelevant theory of financial agglomeration and economic growth, analyze the relevantmechanism of financial agglomeration and economic growth. Then, according to theeconomic and financial situation of Hunan province, it establishes a reasonable indexsystem, uses the principle component analysis to analyze the financial agglomerationtrend of Hunan province. On the basis of above results, it makes a empirical analysison the relationship between financial agglomeration and economic growth of Hunanprovince. Finally it draws the conclusion and puts forward relevant policy suggestions.The main conclusions of the study are: Hunan province’s financial agglomeration andeconomic growth are showing an increasing trend, and showing an acceleratinglygrowing trend in recent years. There is a long-term co-integration relationship between financial agglomeration and economic growth. In the first to third lag phase,economic growth is the Granger cause of financial agglomeration. In the fourth lagphase, there is reciprocal causation relationship between financial agglomeration andeconomic growth of Hunan province, and they promote each other.