Study On The Threshold Effect Of Financial Agglomeration Affecting Urban-rural Income Gap

The report of the Nineteenth National Congress clearly stated that “the main contradictions in our society have been transformed into the contradictions between the people's growing needs for a better life and imbalanced and inadequate development.” The income gap between urban and rural areas is one of the main factors leading to the imbalance and inadequate development in China.The persistently high income gap between urban and rural areas not only reduces the total consumption of residents,harms the fairness and justice of the society,but also restricts the improvement of the quality of the labor force,causing social instability,these factors will in turn affect the speed and quality of economic growth.In short,the urban-rural income gap has become one of the important factors hindering China's economic balance and full development.As the basic resource for economic operation,finance is an important tool for regulating the redistribution of social income.Financial agglomeration,as an important organizational form of financial resources,is a product of financial development to a certain stage and an important form of financial development in the future,will inevitably have an important impact on the income gap between urban and rural areas.With the continuous advancement of urbanization and globalization,the importance of cities is becoming increasingly prominent.Cities are the natural space carriers of finance,and urban agglomerations will also become the main carriers of China's economy and population agglomeration in the future,and will become the core area of national and regional economic development and participate in international competition.Therefore,in this realistic background,this paper selects the cities in the ten largest urban agglomerations as the research sample,using data from 2006 to 2016,based on the panel threshold model to examine from three perspectives: banking agglomeration,securities agglomeration,and insurance agglomeration.The threshold effect of the urban-rural income gap based on the three factors of financial agglomeration based on human capital level,urbanization level,and economic development level.The study found:(1)The effect of financial agglomeration on the urban-rural income gap does have a non-linear characteristic,showing a threshold effect based on the level of human capital,urbanization,and economic development.The narrowing effect of the agglomeration of banking,securities,and insurance industries on the urban-rural income gap can only be gradually reflected with the crossing of corresponding thresholds.That is,in order to play a role in reducing the income gap between urban and rural areas through financial agglomeration,we must first raise the level of human capital,urbanization and economic development in cities and urban agglomerations;(2)When the human capital level,urbanization level and economic development level of different cities and urban agglomerations are at different stages of development,the agglomeration of their banks,securities and insurance industries will have different effects on the urban-rural income gap.Among them,the securities industry can play a role in reducing the urban-rural income gap under the lower level of human capital,urbanization and economic development;(3)With the level of economic development as the threshold,it can be seen that with economic development,the impact of banking agglomeration on the urban-rural income gap is becoming less and less significant.When the per capita real GDP crosses the threshold of 0.3039(50876.25 yuan),the impact of banking agglomeration on the urban-rural income gap is no longer significant;(4)The sample cities and urban agglomerations have different passing conditions based on the three threshold variables.There are relatively more sample cities and urban agglomerations that cross the threshold of human capital level and economic development level,while there are fewer sample cities and urban agglomerations that cross the threshold of urbanization level.This reflects that certain cities and urban agglomerations have made some progress in improving human capital and promoting economic development,but urbanization needs to be further promoted.Based on the above research conclusions,this article proposes the following policy recommendations:(1)Adhere to the development concept of "development is the top priority,talent is the first resource,and innovation is the first motive force" to provide a solid economic foundation,rich human resources and a steady stream of innovation power for the development of cities and urban agglomerations,and create favorable basic conditions for financial agglomeration to play a role in narrowing the income gap between urban and rural areas;(2)Cities and urban agglomerations must correctly understand their development stage,and weigh the impact of the agglomeration of banks,securities,and insurance industries on the income gap between urban and rural areas in accordance with their different levels of human capital,urbanization,and economic development.Select industrial agglomerations that play a role in narrowing the urban-rural income gap,formulate appropriate development plans,and further improve their agglomeration levels to promote their strong radiating role in surrounding rural areas and reduce the urban-rural income gap;(3)Construct a comprehensive,multi-layered,and highly efficient financial system.While ensuring the steady development of the banking industry,gradually pay attention to the role of the securities industry and the insurance industry to ensure that the role of the securities industry and the insurance industry in regulating the urban-rural income gap can be fully exerted;(4)Actively promote the construction of new-type urbanization,vigorously improve the urbanization level of cities and urban agglomerations,adapt to local conditions,take advantage of the situation,make up for shortcomings and create advantages,and provide urbanization guarantees for financial agglomeration to reduce the urban-rural income gap.The research in this article helps to clarify the impact of financial agglomeration levels based on three sub-sectors on the urban-rural income gap between cities and urban agglomerations,and provides a set of quantitative reference systems based on three threshold variables.The threshold range of each city and city group is given by the end of 2016.It provides a reference for cities and urban agglomerations to understand their own development stages,and provides a theoretical reference for how to rationally use financial agglomeration to reduce the urban-rural income gap.It is helpful to open up a new perspective of studying the urban-rural income gap at the city level,and it is of great significance to the rational allocation of financial resources within cities and between urban agglomerations,the formulation of development strategies and the construction and cultivation of financial centers.