Empiricial Analysis In The Impact Of Financial Development On China's Urbanization Process

In the process of urbanization, the financial element is one of the most important factors to promote the urbanization. Currently in China's rapid urbanization is often rely on bank loans, the state financial input as well as land and other sources of urban construction funds. However, the process of urbanization requires a lot of capital investment, and this has a huge amount of investment, capital investment recovery characteristics of long, so the above financing alone is not enough to support further development of urbanization. Therefore, through a variety of financial instruments, financial markets expand financing channels of urbanization, for further promoting China's urbanization process is of great significance. Another healthy and orderly market, financial markets can effectively configure resources to promote the further development of the urban economy, which is the fundamental driving force of urbanization. Therefore, this paper considers that the reality of China's urbanization background as the basis for analysis of China's urbanization and practical needs of the practical problems, to explore the city influence of financial development on the city mechanism and affect the way for China's urban development has a certain theoretical significance practical significance.Firstly, we analyze the statistical indicators to measure the level of financial development in the city and urbanization level. Combined with China's actual data, descriptive analysis of China's financial development and urbanization of the basic features. From 1952 to 2008 China's total loans from financial institutions to GDP ratio -FD emerged as a rising trend. After the reform, China's total loans from financial institutions to GDP ratio - FD the growth rate of the sequence there is a clear improvement. From 1952 to 2008 China's four state-owned commercial bank loans to total loans ratio of financial institutions - the declining trend has emerged, indicating that the level of financial development in China has been improving. Financial development in the nineties of last century the rate continues to increase. 1949 - 2008 China's urbanization rate changes. You can see that China's urbanization rate before and after the reform in 1978 showed a different pattern of change. Prior to the reform and opening up China's urbanization level presents a "inverted U" curve characteristics.In this paper, the classical theory of financial development in the financial structure of the three theories, McKinnon. Shaw school of theory, theory of financial system functions are analyzed and explained. In the classical theory based on this paper, analysis and interpretation of the theory of financial development for the effects of urbanization of the internal mechanism. Financial markets, financial products have a great human society the system of innovation. Financial markets, financial products makes the emergence of market economy on the ability to greatly enhance the allocation of resources, thereby increasing the efficiency and level of economic growth. In the actual process of urbanization will need a lot of money, labor and other production factors as urbanization, development of material guarantee. In the urbanization process, not a lot of investment as a basis for urban development is out of the question. Urbanization process of the formation of the urban population and urban economic activities, the double cluster effect. Formed due to urbanization combined effect, the city formed a unique structure of the urban economy and urban population of production and life. Guidance in the process of urbanization, urban modernization, thus making the city a high degree of urban economic development, urban living standards improved. Financial development to promote the urbanization process, and at the same time raising the level of urbanization is also thereby affecting the city's financial development.Analysis of urban development and urbanization of the financial relationship between, both by the city's location, historical factors and other factors, but also by countries in various periods of macro policies. Therefore, only the use of cross-sectional data or only the use of time-series data often do not meet the need for analytical purposes. In this paper, in 34 cities between 1993-2009 years, loans by all financial institutions to GDP ratio, four state-owned commercial bank loans to total loans ratio of financial institutions and urbanization indicators, the establishment PVAR model, on the basis of analysis of urban financial development on the city's urbanization level of interaction between the relations. Study found that in the long term, the degree of financial development in the city Granger cause. Financial development and urbanization of the regression coefficient is positive, which means that financial development can promote an increase in the degree of urbanization. Financial development in the city, making the city more complete financial system for the urbanization process in the operation of the economic system provides an efficient, comprehensive payment system. City financial system to ensure that the city economy in the saving and investment behavior of normal behavior, providing a channel for financial intermediation, the completion of the capital in the urban economy of the cycle. Financial institutions, city development, urban development and urban financial products complete the financial system and systematic will reduce transaction costs in the urban economy, regulating the effectiveness of urban investment, and promote the process of urbanization increased savings for the development of urbanization further improve the necessary financial support.In this paper, 34 cities in 1993 - 2009 all loans from financial institutions to GDP ratio -FD the four major state-owned commercial bank loans to total loans ratio of financial institutions -BS and the total investment in urban fixed assets -INV the establishment of panel cointegration model analysis financial elements of the urban fixed assets investment influence the intensity of research investment behavior of Chinese cities and the intrinsic relationship between financial development, and thus carry out a comparative analysis between regions. The study found: loans by all financial institutions to GDP ratio -FD for urban investment are positive stimulus. From China, eastern, central and western regions of these three major categories of view, the western city of all loans from financial institutions to GDP ratio -FD the impact of investment for the city as opposed to the eastern and central city impact. Four state-owned commercial banks, loans to total loans ratio of financial institutions - BS investment implications for the city showed a significant negative impact on relationships. Overall, the eastern city of four state-owned commercial bank loans to total loans ratio of financial institutions -BS investment impact on the city to be significantly higher than the western city of impact. Most cities in the next period of adjustment to equilibrium deviation of 15% or more, to fully explain investment behavior of Chinese cities and the long-run equilibrium relationship between financial development is relatively stable.This article also focus on financial development on the role of urban upgrading the theme, create a dynamic panel data model, analysis of China's urbanization process, the financial development of the city's role in upgrading the industrial structure. The results show that financial development is indeed the city urban upgrading of industrial structure has a certain positive role in promoting, and is worth noting that such a role in promoting a certain lag. Current level of financial development will not be upgrading to the current city has significant impact, but the city's financial impact on the subsequent development of urban industrial structure upgrading.Finally, the paper using data envelopment analysis (DEA) measures of China 2009 34 performance of the city's urbanization. 34 cities from 2009, the urbanization of the performance evaluation results can be seen, Guangzhou, Shenzhen, Hangzhou, Shanghai, Qingdao, Dalian, a city of the five cities are in the performance of more than 0.9, higher than other cities, urban performance. The performance of low urbanization of the city of Hefei, Nanchang, Taiyuan, Guiyang, Lanzhou and other cities, the urbanization of performance are in 0.6 below. According to non-parametric statistical hypothesis testing-Mann-Whitney U test results, you can see 2009 34 cities in China's urbanization regional differences in the performance of the test show that China's western cities, cities in central and eastern cities, the city's urbanization, there are significant differences in performance. The city and the western city of central China's urbanization of the city did not exist between the performance of significant differences. All loans from financial institutions to GDP ratio -FD and four state-owned commercial banks, loans to total loans ratio of financial institutions -BS the city of performance evaluation results -CV there were significant positive impact on relationships.