The Space Effect Research On Financial Scale Impact On Regional Economic Growth Of Our Country

Since the economic reform policy was implemented, the economy in China has been rapidly increasing due to the dramatic development of the financial industries. The 18 th National Congress of the Communist Party of China initiated a new age in China to comprehensively deepen the reform. Financial system reform plays a critical role in economic system reform which is important in the comprehensive reform. Currently, the economic development is slower than previously and industrial and cost structure keeps growing. In addition, the adjustment speed of regional industrial structure is slow, and the investment of marginal output keeps descending. In this new situation, it is very important to improve the driving force of financial development in order to the increase the economy.According to the conventional theory of production, the study discussed in this paper selected the parameters which influence the financial scale based on labour and capital and used the framework of financial externality to establish a production model consisting two parts. The assumptions made in this study were:(1) the economy was isolated;(2) the economy involved in the model only contained financial department and entity department;(3) the technological progress was neutral;(4) the economic structure kept stable. Taken the spatial spillover effects of the financial department into consideration, the effects of the financial scale on the economic development has been analysed which theoretically clarified the nonlinear relationship with inverted U type between financial scale and economic development.The study described in this paper selected three parameters to characterise the financial material capital scale involving year-end per capita deposit balance, year-end per capita loan balance, and year-end per capita total loan. Meanwhile, the study measured the financial scale of human capital based on the ratio of number of people employed in finance and the local year-end population. According to the variation of the four parameters, the temporal and spatial variation of the financial scale in each region in China was analysed. Furthermore, the current situation of the financial scale development in China has also been analysed. From the prospective of temporal and spatial characteristics of financial scale, all the parameters which were used to measure the financial scale stably increase with the time variation. Moreover, the financial capital scale in the eastern part is much higher than the middle, western and northeast parts.This study established the nonlinear spatial surface Durbin model to nonlinearly and spatially estimate the influence of the financial scale on the regional economic development based on the per capita GDP. The data points adopted in the estimation were selected from 282 cities from 2003 to 2012. The outcomes showed that the relationship between financial scale and the economic development in the entire area of China is nonlinear with inverted U type. Regional economic development is not only affected by the local financial development, but also related to the financial development in surrounding areas. It was found that the financial scale of the other cities within 500 km can restrain the local economic development. The economic development of adjacent areas can promote the local economic development which shows spatial spillover effects. The effects of financial scale on the economy in the whole area of China and the economy in the four regions are significantly different due to the spatial spillover effects of financial scale and economic growth.