Study On The Impact Of Financial Agglomeration On Total Factor Productivity Of Manufacturing Industry

After years of development in China's manufacturing industry,the overall scale has reached to the top in the world.However,there are still many problems in China's manufacturing industry.for example,Product manufacturing is low,research and innovation are ineffective.On May 19,2015,the government announced the "Made in China 2025 Strategy" and proposed the implementation of "innovation promotion",that is,to promote the sustainable development of the manufacturing industry through the improvement of total factor productivity.As an important part of the development of the market economy,the financial market will inevitably affect the operation of the entire social economy.Particularly,the financial agglomeration center will play a certain role in promoting local enterprise innovation,which will in turn increase the total factorproductivity of the manufacturing industry.Therefore,the study of the relationship between the level of financial agglomeration and the total factor productivity of the manufacturing industry,is of great significance to deepening financial reform and promoting the construction of a powerful manufacturing country.Based on the existing literature,this paper analyzes the theoretical mechanism of the affect of financial agglomeration on the total factor productivity of manufacturing.Then,the location quotient is used to calculate the concentration level of the financial industry and the banking,securities,and insurance industries in each province.The paper uses the DEA-Malmquist productivity index to measure the TFP of the manufacturing industry in 31 provinces and the TFP of the 28 manufacturing sectors in 2004-2015.Finally,a dynamic panel model is used to empirically examine the impact of financial agglomeration on total factor productivity of manufacturing,changes in technological progress,changes in pure technological efficiency,and changes in economies of scale.At the same time,industries are grouped into the banking,securities,and insurance industries to study the influence of the financial agglomeration on TFP.The empirical results show that: 1 ?Financial agglomeration has a significant positive effect on the total factor productivity of the manufacturing industry,but this promotion effect is relatively small;2?Financial agglomeration increases the totalfactor productivity of the manufacturing industry mainly through technological progress;3?Banks and securities industry can,to a certain extent,promote manufacturing enterprises to increase total factor productivity.The banking industry has a relatively large effect.The research results of this article have further expanded the understanding of the financial laws and provide a certain theoretical basis for promoting the financial industry to serve the real economy and manufacturing's transformation and upgrading.