An Empirical Research On China’s Regional Financial Industry Agglomeration And Influencing Factors

Under the development of economic globalization and multinational enterprise,the flow of international capital has a broader range, promoting financial resources’spatial agglomeration. Financial industry agglomeration has become a main way offinancial industry development.In the meanwhile, because of financial industry’spromotion of modern economic growth, financial industry agglomeration is one way ofChina’s regional economic development.China’s regional governments are promotingthe implementation of financial center strategy to make financial industryagglomeration’s development become backbone in regional economic competitiveness’growth.However, economic regions’ resource integration capability needs to beimproved. It is critical to determine the dominant factors in regional financial industryagglomeration clearly to implement different regional development modes.Taking into the economic reason theories of financial industry agglomeration, thispaper analyzes the current situation of China’s regional financial industryagglomeration and its factors quantitatively with quotient of location as the measure offinancial agglomeration and with the panel data from31provinces between2003and2011as our objects. The main content includes: Firstly, on the basis of preliminarydiscussion and summary of domestic and international literatures on financialagglomeration’s definition and reason, this paper defines three core elements offinancial agglomeration. And we analyze its characters, measurement and reasontheories. Secondly, considering the availability of data, this paper analyzes the currentand future situation of china’s financial industry agglomeration in detail with regionaland provincial perspectives. On the one hand, four major economic plates’ total scaleof financial industry and sub-sectors are compared and analyzed. The study resultshows that the development of china’s regional financial industry agglomeration isnon-equilibrium. There is a compelling advantage to eastern China’s financialagglomeration. On the other hand, the integrated quantitative evaluation on theagglomeration level of banking, securities and insurance industries for31provincesbetween2007and2011are made by position quotient law. The result tells us that thedevelopment of China’s provinces’ financial agglomeration are different. Some easternprovinces, such as Beijing, Shanghai,Guangdong and Tianjin, have much higherdegree than several western provinces (such as Yunan, Guizhou, Sitsang and Ningxia).The difference of insurance industry’s agglomeration between31provinces ismuch larger than the other industries.Thirdly, on the basis of theoretical analysis, thispaper introduces four hypotheses. The effected factors are selected as the rural industryagglomeration, economic foundation, human capital and the information level. With2003-2012years’ panel data of31provinces in China, we built econometric models ofChina’s and regional financial industry agglomeration, then using Eviews6.0toestimate the results.The study finds that economic foundation and human capitalsignificantly and positively influences the financial industry agglomeration of thewhole country and all regions. The rural industry agglomeration and the informationlevel have different influence on different regions.The study result shows that each economic region has its specified dominantfactors which affecting its financial industry agglomeration. Based on the conclusion,we provide police advices for future development; Figure out the dominant factors foreach economic region to implement different regional development modes. Developregional economic to strength financial industry’s scale effects. Built strategic supportfor financial agglomeration and promote financial industrial cluster development.