The Financial Industry Agglomeration Effects On Regional Economic Growth

With the liberalization and globalization of the economy, financial resource has flowing swiftly and conveniently around the world, this has causing one apparent phenomenon:those financial resources are beginning to concentrate in some central cities. Many financial industry aggregation researches show that there is very close interaction between financial industry aggregation and economic growth. Many domestic scholars has studied the relationship between financial industry aggregation and economic growth in areas of the Yangzi River or one particular province or city, but areas of Bohai Ring and Pearl River are rare. They also prove that there is a stable relationship between financial industry aggregation and economic growth. Pearl River Delta, as one of the three national strategy regions in China, has made an incredible economic and financial achievement since the reform and opening up policy. This paper tries to find out the relationship between financial industry aggregation and economic growth of Pearl River Delta base on both theory study and empirical research. On this foundation, this paper attempts to draw out suggestion of financial industry and economic growth in Pearl River Delta.Firstly, based on the theory research of financial industry aggregation, this paper first study the current situations of economic and financial development of Pearl River Delta, and the data shows that the economy grows very quickly. The data also shows that the financial sector is booming and the economic structure is optimizing gradually.Secondly, adopted the Factor analysis, this paper establishes a comprehensive index evaluation system to gauge the financial industry aggregation level of the 9 cities of Pearl River Delta in 2013. The result shows that Shenzhen has the highest level, followed by Guangzhou, the other 7 cities has lagged Far behind the former two.This paper using another method-Quotient Location-to measure the financial industry aggregation level of Pearl River Delta from 2000 to 2013. Adopting error correction model and granger causality test to do empirical research, this paper find out that there is long term stable relationship between financial industry aggregation and economic growth in Pearl River Delta, and financial industry aggregation in Pearl River Delta is the granger reason of economic growth.