Study On Financial Industry Aggregation And Its Impact On Economic Growth

Finance is the overall hub in the modern market economy,and it has a non-fungible position in economic development.Along with the global economic integration and the rapid development of financial industry,financial resources accelerate flow within the scope of space.Financial institutions and financial activities gradually focus on one area,and the economic phenomenon of financial industry agglomeration has been produced.In fact,the area of high level of financial agglomeration,the level of economic development is also relatively high.Therefore,it is very important to research the economic effects brought by financial agglomeration.Hangzhou is a bright pearl in the southeast coastal area,and it is the capital of Zhejiang province which private economy is very active.Hangzhou already have good financial ecological environment and high level of financial services,so it is worthy of the name of the financial agglomeration.In early 2008,Hangzhou proposed to build the south of Yangtze River Delta financial center.Hangzhou adhere to serve the small and medium-sized private enterprises,with the development of the dislocation of Shanghai.Then,how does the financial agglomeration in Hangzhou have a specific impact on economic growth?The study on this problem has great practical significance.This study taking the characteristics of financial industry agglomeration as the starting point,and based on the theoretical framework of domestic and foreign financial industry agglomeration,and around with the financial agglomeration and economic growth.First of all,we defined the financial agglomeration and described the formation mechanism according to the related theory,on the basis of the existing research results at home and abroad.Then,we analyzed the economic growth effect of financial industry agglomeration with the help of financial function theory and LS model theory.Then,we analyzed the present situation of financial agglomeration in Hangzhou,and we also used the location entropy index to measure the agglomeration degree of banking,security and insurance industry of Hangzhou.Finally,we added the financial agglomeration index which measured by principal component analysis method to the Cobb-Douglas Function.Then we constructed the Error Correction Model through the Granger Causality Test.It is proved that the financial agglomeration has a great effect on the regional economic growth in Hangzhou.From the results of the empirical research,the financial agglomeration index of Hangzhou is 1.7664 in 2014,the country ranked fifth,second only to Shanghai,Beijing,Shenzhen and Guangzhou.By analyzing from the perspective of longitudinal financial agglomeration index of Hangzhou,we can be find the 1990-2014 financial industry agglomeration index of Hangzhou has been on the rise and growing rapidly.The second-order difference of the time series of the selected variables in the empirical model is stationary,and there is a long-term stable equilibrium relationship among the variables.The test result shows that the financial agglomeration and economic growth has a positive correlation in Hangzhou,and the financial agglomeration promotes the economic growth to a certain extent.Based on the research conclusion,we put forward the policy recommendations conducive to the healthy development of the financial industry agglomeration in Hangzhou.