Research On The Influence Of Financial Agglomeration Structure On The Income Gap Between Urban And Rural Residents

In recent years,China has delivered an excellent answer to the world in terms of economic growth.While financial development has helped the economy to leap forward,China’s financial markets and financial system have also become more regulated.It is important to note that,due to the profit-seeking nature of capital,financial resources,institutions and trading activities will continue to flow to areas with advantages,forming agglomeration centres in order to obtain more benefits,thus creating financial agglomeration,which has given an important impetus to regional economic growth and led to rapid growth in the income of residents in agglomeration areas,in which the income gap between urban and rural residents will inevitably be affected.Based on this background,this thesis explores the structure of financial agglomeration and investigates the mechanism of its effect on the income gap between urban and rural residents,in order to provide theoretical basis and policy recommendations for narrowing the income gap between urban and rural residents in China.This thesis firstly reviews the existing research results,explains the basic theories of financial agglomeration and the income gap between urban and rural residents,explores the mechanism of the former’s influence on the latter,and puts forward relevant research hypotheses.In terms of the measurement of variables,the location entropy index is used to measure the agglomeration index of the three financial sectors of banking,securities and insurance,and then the explanatory variable financial agglomeration index is calculated from the three sectors through principal component analysis,and the ratio of urban residents’ and rural residents’ income is chosen to measure the explanatory variable urban-rural residents’ income gap.Secondly,data from 31 provinces,cities and autonomous regions from 2011 to 2021 are selected to describe the current situation of financial agglomeration and the income gap between urban and rural residents in China.In the empirical analysis,fixed-effects models are used to determine the non-linear relationship between the explanatory variables and the explanatory variables,while panel threshold models are used to test whether the hypotheses are valid.Finally,the empirical results are used to draw conclusions from the study,and corresponding policy recommendations are made,taking into account the specific current situation in China.The findings of this thesis show that: from a national perspective,the Kuznets’ inverted "U"-shaped relationship holds and there is a single-threshold effect,with financial agglomeration widening the income gap between urban and rural residents in areas with low GDP per capita,and financial agglomeration playing a significant role in improving the urban-rural income gap when GDP per capita crosses a certain threshold.From a sub-regional perspective,the impact of financial agglomeration shows heterogeneity,with the effect of widening the income gap being greater in less economically developed regions than in economically developed regions;from a sub-industry perspective,there are also significant differences in the effects produced by agglomeration in different financial sectors,with banking agglomeration having a significant negative effect on the income gap between urban and rural residents,and securities and insurance agglomeration showing an effect of first widening and then narrowing.