Research On Financial Agglomeration’s Spatial Effect Mechanism On Regional Economic Growth

Financial agglomeration theory rises in recent decades. It means temporal dynamicchanges of the coordination, configuration and combination of financial resources andgeographical conditions. The growth and development of financial industry, and thusthe change process in a certain geographical space to generate the financialregional-intensive systems (Liu Hong,2008). Financial agglomeration process is mainlyaffected by the mechanism of financial efficiency Pareto improvement, specificperformance is that the financial resources are concentrated both in space and diffusion,these two processes both antagonistic and unified.Financial development made a stable, long-term impact on economic growth.While the financial agglomeration is considered as the way that financial developmentaffects economic growth. In view of the financial agglomeration of both centralized andthe proliferation of features, there are growth effects and radiation effects on economicgrowth, these two effects are able to elaborate by financial functions, and industrialrestructuring, knowledge spillovers mechanisms. The researches of financialagglomeration’s effects on economic growth have become abundant, thus, this studywill draw support from financial function theory, industrial economy theory andregional innovation theory, combining with spatial statistics and spatial econometricmethods to analyze the mechanisms of financial agglomeration’s effects on regionaleconomic growth. The main conclusions are as follows:As Levine’s (1997) classification, finance has five basic functions: facilitating thetrading of risk, avoiding dispersion and aggregation; allocation of resources; supervisionof managers, the promotion of corporate governance; gathering savings; facilitating theexchange of goods and services. Through the play of the five financial functions, thefinancial agglomeration strengthens the region’s financial functions, leads to theaccumulation of capital and technological innovation, thus, affects the real economygrowth.Financial resource allocation has a direct and significant effect on macroeconomicperformance and micro enterprises, the flow of financial resources will play a crucialrole in the adjustment of industrial structure. Adjustment of industrial structure, upgrade,and conversion cannot do without the financial support and collaborationdevelopment. Financial agglomeration will promote industrial restructuring and optimization of regional industrial structure, thereby promotes regional economicgrowth.Financial agglomeration accompanied by industrial agglomeration and industrialtransfer, the process of knowledge spillover mechanism provided an important conditionfor regional innovation, will greatly contribute to regional innovation capability, andthus plays a role in promoting regional economic growth.This study attempts to summarize the financial agglomeration’s spatial impact onregional economic growth. Limited by personal skills, there are still many deficienciesin the design of indicators and the analysis of models, further study and discussion areurgently needed.