Research On The Effect Of Financial Agglomeration On Regional Economic Growth

Over the past 40 years of reform and opening_up,China’s economy has maintained rapid growth with an almost double-digit anual growth rate.However,in recent years,China’s economic situation has undergone great changes,"structural slowdown"has become the"new normal"in the current economy.The 19th National Congress of the Communist Party of China gave an important conclusion that"China’s economy has shifted from a high-speed growth stage to a high-quality development stage".It can be seen that government no longer explicitly emphasizes the"quantity" goal of economic growth,but pays more attention to the high-quality economy development,thus explicitly proposes to increase the total factor productivity.At the same time,as the core of modern economy,financial industry is playing an increasingly important role.In recent years,the upsurge of financial center construction has arisen nationwide,and the development of China’s financial industry has shown an increasingly obvious trend of agglomeration.Moreover,since the"first year of Internet finance"in 2013,the booming development of Internet finance such as P2P has made the connotation of financial agglomeration more abundant.At present,"enhancing the ability of financial services to serve the real economy"is constantly mentioned in government documents.In this context,it is of great theoretical and practical significance to study the effects of financial agglomeration on regional economic growth.Based on the paradigm of theoretical analysis and empirical test,this paper focuses on the theme of"the impact of financial agglomeration on regional economic growth".Firstly,this paper sorts out the logical evolution of theories related to financial agglomeration,systematically analyzes the theoretical mechanism and specific path of financial agglomeration influencing regional economic growth,and constructs a theoretical model of financial agglomeration influencing total factor productivity(TFP).Secondly,this paper measures the financial agglomeration and TFP of 37 financial centers in 2007-2016 by using the comprehensive index system and DEA-Malmquist index.Then,starting from the dual perspectives of traditional finance and Internet finance,this paper empirically examines the influence of traditional financial agglomeration and Internet financial agglomeration on regional economic growth by building dynamic panel data model and spatial econometric model.Finally,this paper empirically tests the impact of traditional financial agglomeration on TFP,and the spatial spillover effect of Internet financial agglomeration on TFP.The contribution of this paper is to reveal the internal impact of China’s financial agglomeration on regional economic growth and TFP.Combined with the current situation of financial agglomeration and economic development,this paper puts forward policy recommendations for regional economic growth and TFP improvement from the perspective of improving financial resource allocation,spatial mobility and optimizing financial agglomeration.The main conclusions of this paper are as follows:(1)The results of financial agglomeration evaluation show that the level of financial agglomeration is affected by both scale factor and efficiency factor.They are the direct reflection of financial agglomeration on the level of"quantity"and"quality".Cities with larger scale factor score do not necessarily have higher efficiency factor score,and cities with lower scale factor score do not necessarily have lower efficiency factor score.There are great differences in financial agglomeration levels between China’s financial centers,and the international financial centers(Beijing,Shanghai and Shenzhen)rank among the top three.Among the regional financial centers,Guangzhou,Chengdu,Hangzhou and other new first-tier cities are absolutely in the lead,while the financial agglomeration levels of the central and western provinces(or capitals)are relatively lower.In addition,this paper also analyzes the financial radiation capabilities of each financial centers.The conclusion is that only 14 financial centers have relatively stronger financial radiation capabilities.North China,East China,South-central and Southwestern regions in our country have formed different financial radiation pattern.(2)In the dynamic effect test of traditional financial agglomeration on regional economic growth,the conclusion is that regional economic growth has obvious dynamic inertia characteristics,which will be significantly affected by its own pre-value.In terms of the full sample,traditional financial agglomeration has a significant negative impact on regional economic growth,but there are significant differences in the regression results of the sub-sample groups.When the financial agglomeration level is relatively lower,the financial agglomeration can bring obvious positive promotion effect on regional economic growth.There is an obvious"inverted U-type"non-linear relationship between the financial agglomeration of the lower-level sample group and the regional economic growth.When the geospatial factor is introduced,and Spatial Durbin Model(SDM)is constructed to empirically test the spatial spillover effect of traditional financial agglomeration on regional economic growth,it is concluded that there are significant positive spatial autocorrelation characteristics in the economic growth level of financial centers.In terms of the foll sample,financial agglomeration still has a negative impact on regional economic growth,but it is not significant.The level of economic gro.Awth in neighboring cities show obvious positive spatial spillover effect,while the positive spatial spillover effect of financial agglomeration is not significant.The regression results of sub-sample groups are obviously different.When the financial agglomeration level is relatively lower,it can promote regional economic growth.There is an obvious"inverted U_type"non-linear relationship between them,and the spatial lag coefficient of financial agglomeration of lower-level sample group is significantly different from that of the whole sample,which indicates that lower-level financial agglomeration has a certain negative spatial spillover effect on regional economic growth.In addition,the empirical test results of traditional financial agglomeration on resident consumption and fixed asset investment show that financial agglomeration can significantly promote resident consumption expenditure,while there is an obvious"inverted U-type" nonlinear relationship between financial agglomeration and fixed asset investment.The different influence relationship of financial agglomeration on resident consumption and fixed asset investment can be transmitted to economic growth.(3)In the influence effect test of Internet financial agglomeration on regional economic growth,this paper empirically tested the spatial spillover effect by constructing a Spatial Durbin Model(SDM).The conclusion is that the development level of Internet finance in financial centers shows obvious positive spatial autocorrelation and obvious spatial agglomeration.Internet financial agglomeration and the economic growth level of neighboring regions can bring significant positive impact on the economic growth of this region.However,Internet financial agglomeration has obvious negative spillover effect,namely the development of Internet Finance in financial centers and its relatively obvious agglomeration trend have not radiated the economic growth of surrounding areas,but have obvious negative regional externalities.(4)In the influence effect test of financial agglomeration on TFP,this paper empirically tests the effect of traditional financial agglomeration on TFP based on measured financial agglomeration and TFP data,and empirically explores the spatial spillover effect of Internet financial agglomeration on TFP based on the data of"Internet Financial Development Index of Peking University".Firstly,the test results of dynamic effects show that TFP of financial centers have obvious dynamic inertia characteristics,which will be significantly affected by its own pre-value.Traditional financial agglomeration has a positive effect on TFP,and there is an obvious’"inverted U-type"non-linear relationship between them.From the perspective of specific decomposition terms,financial agglomeration has a positive effect on TFP mainly by promoting technological progress and improving pure technological efficiency,but there is a significant negative relationship between financial agglomeration and scale efficiency change.Then,by introducing geospatial factors and constructing Spatial Durbin Model(SDM),this paper empirically tests the spatial spillover effect of traditional financial agglomeration on TFP.The conclusion is that there is a significant positive spatial autocorrelation characteristic of TFP.When considering geospatial factors,financial agglomeration in financial centers has a significant negative impact on TFP,which is obviously different from the results of dynamic panel model.The level of TFP in neighboring cities can have a significant positive effect on TFP of this region,thus showing significant positive spatial spillover effect.However,the spatial lag coefficient of financial agglomeration is not significant in the negative direction,which indicates that the financial agglomeration of neighboring cities will bring a certain degree of negative impact on TFP of this region,thus showing a certain degree of negative spatial spillover effect.In conclusion,when considering the geographical factors,financial agglomeration in financial centers will not only bring significant adverse effects on TFP of this region,but also have a certain degree of negative regional externalities.Finally,Internet financial agglomeration has a negative impact on TFP of this region,but it can bring positive spatial spillover effect on TFP at the geospatial level.The innovation of this paper can be summarized as the following three points:The first one is the research perspective.The booming development of Internet finance enriches the connotation of financial agglomeration.Therefore,according to the actual development of China’^financial industry,this paper studies its impact on regional economic growth from the perspective of both traditional financial agglomeration and Internet financial aggIomeration,which can make up for the research vacancies of most scholars in the past.The second one is the research sample.In the past,when scholars studied the impact of financial agglomeration on regional economic growth,they basically took the data of provinces or prefecture-level cities nationwide as research sample.However,the scale of provincial data is large,and the heterogeneity between prefecture-level cities is extremely obvious,both of them are inconsistent with the present situation of financial agglomeration in China as financial center.Therefore,this paper takes 37 financial centers in China as research sample,which is obviously different from previous studies.The third one is the research level.In the past,when scholars studied the spatial spillover effect of financial agglomeration,they mainly concentrated on economic growth.However,with the current transformation of China’^economic situation,both the government and academia have placed more emphasis on the high-quality economic development.Therefore,this paper not only studies the impact of financial agglomeration on regional economic growth,but also further explores the impact of financial agglomeration on total factor productivity.