A Study On The Spatial Externalities Of Digital Finance Development In Central Cities Of Yangtze River Delta Urban Agglomeration

The Yangtze River Delta region is an important intersection of the "One Belt,One Road" and the Yangtze River Economic Belt,as well as the most dynamic region for financial development in China.In recent years,the "Yangtze River Delta integration" has appeared repeatedly in government’s work reports.In December 2019,the Yangtze River Delta Regional Integrated Development Plan Outline was officially released.Since then,the development strategy of regional integration of the Yangtze River Delta has been fully implemented.In the new era,combining digital technology and traditional finance generates digital finance,bringing new opportunities to alleviate financing constraints.However,China’s digital finance has a more serious problem of unbalanced regional development.The Yangtze River Delta region,which leads the Chinese market in digital finance development,is no different.Therefore,it is of great practical significance to study the externalities of the central cities of the Yangtze River Delta urban agglomeration on the development of regional digital finance.This study takes the Yangtze River Delta city cluster as the research object to analyze the effect of digital finance development in the central cities on the digital finance development in the neighboring cities and the impact on the regional digital finance development gap using the data of 26 cities from 2011 to 2020.Specifically: first,this paper designs a statistical analysis method for defining central cities;using kernel density analysis and Moran index to analyze the agglomeration effect of urban digital finance development;and employing the modified Wilson’s maximum entropy model and gravity model to measure the magnitude of radiation radius and radiation volume of central cities,respectively.Second,the externalities generated by regional central cities in the process of digital finance development are empirically tested with panel fixed-effects models and semi-parametric models.Finally,the internal mechanisms of positive externalities are analyzed from innovation spillover,labor force agglomeration,and investment agglomeration;the internal mechanisms of negative externalities are analyzed from the Internet development level gap,higher education level gap,and innovation capability gap.This study shows that(1)the agglomeration effect of digital finance in the Yangtze River Delta city agglomeration is significant,and the regional digital finance development gap has a tendency to expand;the digital finance development of the city agglomeration shows a polycentric characteristic,among which Shanghai,Nanjing,and Suzhou have the largest radiation radius of digital finance.(2)The radiation of digital finance in central cities is beneficial to the development of digital finance in non-central cities,with a diminishing marginal effect.At least at this stage,the radiation from central cities will increase the regional digital finance development gap,which is mainly reflected in the increase of the digital finance development gap among non-central cities.(3)Central cities have positive effects on digital finance development in non-central cities through innovation spillover,labor concentration,and investment agglomeration.However,due to resource siphoning,radiation from central cities will widen the Internet development gap,higher education level gap,and innovation capability gap among non-central cities,resulting in a larger regional digital finance development gap.Based on the findings of the study,the following recommendations are proposed: First,the central government should cultivate or establish regional central cities in multiple directions to give full play to the leading role of central cities in the development of regional digital finance.Second,the government should focus on the development gap between central cities and non-central cities and actively regulate it.Control the development scale of central cities and increase the financial support for small and medium-sized cities.Third,the government should encourage regional innovation,train talents related to digital finance industry with high quality,increase financial support for related industries,and actively introduce foreign investment.