Financial Ecological Environment’s Low-Lying Land Effect And Its Impact On Capital Allocation Efficiency

Under the open economy, attracting foreign capital to promote regional capital formation, improving the allocation efficiency of the regional stock of capital are important means of improving productivity, identification subsequent influence factors have important practical significance. Some theoretical studies access that financial ecological environment improvement has a beneficial effect on the economic performance through capital accumulation effect and the effect of the efficiency of capital allocation. However, in the sense of experience, through which channel that financial ecological environment affect economic performance is inconclusive, therefore, further research has important academic value. In this paper, on the basis of a systematic review of the financial ecological environment research, we discussed financial ecological environment’s impact on region’s capacity of attracting funds and the efficiency of capital allocation. Based on what have done, we empirically test the low-lying land effect and capital allocation efficiency improvement effect of financial ecological environment on national level and Zhejiang province level. In the low-lying land effect aspect, this article applied correlation analysis on the relationship of the risk of investing and financial ecological environment to test the low-lying land effect of financial ecological environment. Based on Chinese provincial panel data, we provide further empirical evidence by applying spatial econometric to the test of financial ecological environment’s "low-lying land" effect. In the capital allocation efficiency improvement aspect, this article did empirical researches from aspects of macro and medium.It is found that financial ecological environment quality and regional investment risk is significant negative correlated, the improvement of financial ecological environment will lower local investment risk and generate capital inflows. Further empirical study shows that improving financial ecological environment quality has significant low-lying land effect on capital, and the empirical conclusion keeps robust. And it is found that the quality improvement of financial ecological environment enhances cross-regional allocation efficiency of credit significantly. At the industry level, the paper finds that the effect on the allocation efficiency of capital of financial ecological environment improving depends on the status of the development industry sectors. For the industry sectors in the good development status, financial ecological environment improving helps improving the allocation efficiency of capital.