The Construction Of Chinese Regional Financial Development Index And Comparative Research

After the financial crisis, countries all over the world pay more and more attention to the development of financial industry. Under the background of economic and financial globalization, our country is facing great opportunities and challenges, and developing the financial industry and improving the financial competitiveness is imminent. At present, our country financial development lags behind, and the regional financial development is imbalance. To improve the level of financial sector development in our country, we must understand its development level, what advantage can be strengthened, and what disadvantage should be improved. Therefore, to establish a measure of Chinese regional financial development index system is particularly important. The existing literature on research of Chinese regional financial development is limited to the construction of index system, lacking of research on objective establish financial development index and the econometric model which is constructed for quantitative studies of literature. The regional financial development index can be used to examine the problem of the Chinese regional financial development quantitatively. Each area can find its shortages and put forward policy recommendations for the development of financial industry and the improving of financial ecological environment.Firstly, on the basis of summarizing the existing literature on financial development index system, according to the theory of financial development, and on the premise of data available, the paper construct the index system of regional financial development which contains three-level index. Level one indicator includes financial ecological environment and financial operation. The secondary indicator includes economic basis, the investment environment, banking industry development level, securities industry development level, insurance industry development level, and financial talent competitiveness. Level-three indicator includes GDP per capita, per capita urban disposable income, total assets of the banking financial institutions/GDP, the domestic stock financing (A, H shares)/GDP, insurance depth, and so on. After the reliability analysis, the result shows that the index system is reasonable. Secondly, in order to guarantee the objectivity of the evaluation, the paper selects three objective evaluation methods to construct regional financial development index——principal component analysis, entropy value method and the CRITIC method. Using these three methods builds financial development index respectively. And then checking the consistency of three results, and it shows that the three results are consistent. For smoothing or balance all sorts of evaluation method of tendency or bias, the three results are arithmetic average, which determines the final regional financial development index. Thirdly, the paper conducts the comparative study for the regional financial development index, level one indicator index, and the secondary indicator index. The results shows that30regional financial development type is divided into four categories:the first category, comprehensive development, such as Shanghai, Beijing, Guangdong and Tianjin; The second category, comparative advantage in banking resources, such as in Fujian province; The third category, comparative advantage in the securities industry resources, such as the Hainan province; The fourth category, comparative advantage in the insurance industry resources, such as Chongqing and Liaoning province. Finally, using the established30areas and5years financial development index builds panel data model to analyze the effect that the regional financial development put on the economic growth comparatively. The result shows that the model is a constant coefficient of double random fixed effects model. The influence coefficient of each regional financial development on economic growth is not different. But on the whole, financial development index for each unit changes, changes in GDP per person is0.377units. Based on the analysis and conclusion, in the end, this article puts forward the suggestions to promote the continuous development of the regional finance.The characteristic of the paper is as followings:firstly, this article is to establish regional financial development index, based on the regional level to explore China’s regional financial development and structure. Secondly, this article is based on three objective evaluation methods to establish the financial development index. Thirdly, in order to make the number of original agency into the relative, in this paper, the original organization number is divided by the number the county level administrative units, which changes the original relative processing by dividing population. Fourthly, to deepen the research, this paper introduced the panel data model, using the financial development index to analyze the effect of financial development on economic growth.