The Study Of Influence Factors Of The Financial Development In Central Region Of China: Theory And Evidence

Since reform and opening, each region of China has a great development which is an unbalanced development, collapse phenomenon in central region is most obvious. There is a big gap with eastern region between economic growth or financial development, central region needs to rise up. With the gradual increasing of the financial position, more and more scholars has been working on the issues related to financial development, and starting to study the factors which may influence the development of financial development. In this paper, under the latest theory of financial development, from economic factors, political factors, rule of law factors and society factors, empirically analyze how the influence factors affect financial development in central region. Thesis topic of this paper has theoretical value and practical value,whether the balanced development or the theoretical view.Firstly, analyze the frontiers theory of financial development and define the relevant concepts,and combine with the current situation of financial development in central region, then reference to the existing literature and data availability, determine the realistic indicators of financial development and influence factors.Secondly, after data preprocessing by the entropy weight method and exponential smoothing, through Hausman test and Likelihood ration test, establish the panel data fixed effects model and further analyze the economic factors. The results show that economic factors and social factors hinder financial development of the central region, political factors promote the financial development, the influence of the rule of law is zero, and analyze the empirical results.Then, establish multiple regression model of six central provinces respectively. Determine the final model by stepwise regression and ARCH heteroskedasticity test. The results broadly consistent with the results of the fixed effects model, each province has respective characteristic in each factors and analyze the empirical results.Finally, based on the empirical results and the analysis, put forward suggestions. The specific circumstances of each province need to be considered when raising the overall level of financial development in central region. This paper presents the following recommendations: adjust and optimize the economic structure, realize and develop the guidance mechanisms of government intervention and e nhance the level of legal construction.