The Study Of Financial Industry Aggregation And Its Impact On Regional Economic Growth

In recent years, with the development of economic integration and financial globalization, financial industry cluster has flourished, promoting economic growth in these areas. From global perspective, New York, London and Tokyo are three major financial aggregation areas. In China, financial street of Beijing and Pudong financial district of Shanghai have grown representative of financial industry gathering.This paper establishes a measuring system of financial industrial agglomeration, determines degree of financial agglomeration in main cities, and further studies effect and channel of financial industrial agglomeration on regional economic growth. This study has important theoretical and practical value. First, it verifies relation between financial industry aggregation and regional economic growth from the perspective of financial resources, and will contribute to the theory of financial development. Second, it defines the connotation, characteristic, measurement and economic impact of financial industry aggregation, developing theory of financial aggregation. Finally, this study will contribute to further development of financial agglomeration, speeding up the construction pace of international financial center.This paper includes7chapters. Chapter â…  is introduction, introducing background and significance of financial industry aggregation, related notions, main content and research method of this paper.Chapter â…¡ is literature review, including theory of financial development, theory of financial resource and sustainable development, theory of financial aggregation.Chapter â…¢ summarizes the connotation, characteristic, background and formation of financial industry aggregation, and investigates the effect and channel of financial aggregation on economic growth, through the theory of financial functions, model of local spill, and the perspective of financial structure.Chapter â…£ establishes measuring system of financial industry aggregation and weighs degree of financial aggregation in main cities. First, this section builds a measuring system of financial industry aggregation which includes economic strength, financial resource, and other non-economic factors. Then, paper chooses28cities and weighs degree of financial industry aggregation, using factor analysis method. The result is that:The total scores of financial aggregation in Shanghai and Beijing are above1and can be regarded as national financial centers. The total scores of financial aggregation in Shenzhen, Guangzhou, Tianjin, Suzhou, Chongqing, Hangzhou, Nanjing and Chengdu are positive, and can be treated as regional financial centers. The total scores of financial aggregation in other18cities are negative and can be viewed as financial growth pole. Finally, this paper calculates financial radius of10cities and draws their financial radiation domain. We find, financial radiation domain of Shanghai, Beijing, Shenzhen, and Chongqing covers Yangtze River Delta, Bohai Economic Zone, Pearl River Delta, and Sichuan in Midwest area.Chapter V analyzes the status quo of financial industry aggregation. First, from national perspective, using degree of market concentration and quotient of location, China has obvious phenomenon of financial industry aggregation. Then, because of diversity of economic development, this paper goes deep into district level, and found verifying degree of financial aggregation in four economic zones and three economic circles. We find Bohai economic rim has the highest degree of financial aggregation, and Yangtze River delta has the highest level of financial development.Chapter VI tests empirically the relation between financial industry aggregation and regional economic growth. First, paper chooses financial center and radiation domain as sample, using pooled OLS, random effect model and fixed effect model. We find that after adding control variables, which are government strength, base installation, labor power, and foreign capital, financial aggregation can promote economic growth notably. Secondly, paper divides financial aggregation into banking industry aggregation, insurance industry aggregation, and securities industry aggregation. Using GMM to verify effects of different financial aggregation on regional economic growth, we find that banking aggregation and insurance aggregation can facilitate economic growth, but impact of securities industry aggregation is unnotable. Last, paper chooses typical financial centers, which are Shanghai, Beijing, Shenzhen and Chongqing, to verify channel of financial industry aggregation on regional economic growth through Granger causality test and impulse response function. The result is that:Beijing's financial aggregation doesn't have growth effect and radiation effect, Shanghai's financial aggregation has growth effect on domestic economy, but doesn't have radiation effect on neighboring regions, Shenzhen's financial aggregation has both growth effect and radiation effect, and has bi-directional causality of financial aggregation and economic growth, Chongqing's financial aggregation has both growth effect and radiation effect, but doesn't have bi-directional causality. Chapter VU summarizes main conclusions and looks forward to the prospects. Shanghai and Beijing have the highest degree of financial aggregation, but there is still a long distance towards international financial centre.This paper studies the financial industry aggregation and its impact on regional economic growth, using the methods of inductive analysis, comparative analysis, combination with dynamic and static, empirical analysis and so on. The empirical analysis method includes factor analysis, Wilson model, pooled OLS, stochastic effects model, fixed effects model, generalized method of moments, Granger causal analysis, impulse response function, and so on. We use these empirical methods to weigh the degree of financial aggregation in main cities, to calculate the radiation region of financial centers, and to verify the effect and channel of financial aggregation on economic growth.The innovations of this paper are as follows:Firstly, this paper structures a measuring system of financial industry aggregation and weighs the financial aggregation degree of main cities. This system includes economic strength, financial resource, and other non-economic factors. Through empirical result, the28cities can be divided into3levels:national financial centers, regional financial centers, and financial growth pole.Secondly, this paper calculated the financial radius of financial centers using Wilson model. We calculate recession factor, threshold value, and resource top limit in order to get financial radius. Then, we draw radiation domain of financial centers, and find that Beijing, Shanghai, Shenzhen and Chongqing's final radiation domain covering three big economic circles and Sichuan in Mideast.Thirdly, this paper studies the effect and its channel of financial development on economic growth, through angle of financial industry aggregation. Paper also divides financial industry aggregation into banking aggregation, insurance aggregation, and securities aggregation. We find that their effects have different direction and strength. Financial industry aggregation's effect on regional economic growth is through growing effect of core region and radiation effect of neighborhood, we found that the growing effect and radiation effect are quite obvious in Shenzhen and Chongqing.