Factors Affecting The Development Of Internet Finance And Its Regional Difference

In 2012, the concept of "Internet Finance" was first put forward. And in 2016, "Internet Finance" is first written into Five-year Plan. As we can see, internet finance is developing rapidly in China. Compared to traditional financial institutions, in reducing the cost of financial services, expanding the financing channels for SMEs and individuals, promoting financial market reform, internet finance has played a greater role. Its past development has been recognized, and the future role will be further emphasized and promoted. Meanwhile in literature, the researches on effect, risk and supervision of Internet banking are relatively rich, the weak link in the study of Internet finance is as below:study on the influence factors of the development of internet finance; how to carry on the research on the selection of the main business development from diversified internet finance; how to adjust measures and supervision to local conditions and characteristics for internet finance. So the author focuses on the factors affecting the development of Internet Finance and its regional difference.Based on the analysis of related literature and development, hypothetical factors has been determined, which contain:level of wealth, and the financing needs of SMEs, the level of consumption, the development of the insurance industry. And Corresponding proxy variables has also been determined,which are deposit, loans balance of financial institutions, retail sales of consumer good, insurance premium. Based on the bsic situation of internet finance and influence factors provided by descriptive statistics, further analysis has been conducted on data about 27 provinces from January 2014 to September 2015. The author determines the influence factors of the development of the internet finance by using panel data analysis model. Furthermore, the differences on the factors between the eastern, middle and western area has also been discussed and analysed by panel data analysis model and dependent variable decomposition. On the basis of the conclusion of the study, the author presents suggestions on government regulation and corporate development, which focuses on adjusting measures and supervision to local conditions and characteristics for internet finance. Finally, based on the lack of research, the author makes a certain description of the future research direction.