Research On The Effect Of Regional Market Potential On Financial Development

In recent years,China’s financial reform has achieved remarkable results,but there are still problems such as unbalanced regional development and insufficient effective supply.Market potential is an important force to promote financial development,and finance,as a tertiary industry,its spatial layout and development are inseparable from the role of market potential.In the critical period of unprecedented changes in a century and the construction of a unified national market,exploring the influence of market potential on financial development is helpful to analyze the intrinsic relationship between market potential and financial development,so as to promote sustained and healthy financial growth.Firstly,through the combing of relevant literature,this paper discusses the relevant theoretical mechanisms of regional market potential affecting the level of financial development,and believes that market potential has a positive effect on financial development,and from a spatial point of view,there are spatial effects on both market potential and financial development.Based on agglomeration effect,scale effect and spatial spillover effect,this paper analyzes the role path of market potential affecting financial development.Secondly,by calculating the regional market potential,the spatial distribution characteristics and temporal and spatial evolution trends of regional market potential and financial development level are comprehensively analyzed.From the perspective of time,China’s regional market potential and financial development level have shown a continuous upward trend.From a spatial point of view,China’s regional market potential and financial development level show a spatial pattern of decreasing step by step with the eastern coastal region as the center and the northwest inland region as the periphery.Furthermore,this paper uses Moran’s I index to analyze the spatial autocorrelation between market potential and financial development,and finds that market potential and financial development level in China not only have spatial autocorrelation,but also show the characteristics of high-high agglomeration and low-low agglomeration.Therefore,based on the data of 264 cities at the prefecture level and above from 2006 to 2019,this paper uses the spatial Dubin model to empirically test and decompose the spatial spillover effect.The results show that the market potential of the region not only directly promotes the financial development of the region,but also has a positive spillover effect on the market potential and financial development of the adjacent region,which can indirectly promote the financial development level of the region.However,there is regional heterogeneity in both direct and indirect effects,and the impact effect of market potential on financial development in the eastern region is consistent with that of the whole sample.Due to the overall low level of market potential in the central and western regions,the direct effect of market potential on financial development is not obvious.The spatial spillover effect of market potential in the central and western regions is the opposite,the spillover effect of the market potential level in the central region will inhibit the financial development of the surrounding regions,and the western region will have a positive spillover effect in the regions with high market potential due to the large gap in market potential between regions,driving the financial development of the surrounding regions.Finally,based on the empirical test results of the characteristics and influencing effects of regional market potential and financial development,this paper puts forward policy suggestions such as fully promoting the construction of a unified national market,smoothing production,consumption and circulation,promoting effective growth of consumption and investment,relying on regional financial centers and urban agglomerations to strengthen spatial spillover effects,strengthening regional cooperation and exchanges,and exploring institutionalized regional cooperation mechanisms,so as to provide reference for enhancing regional market potential and promoting sustainable and steady financial development.