An Empirical Study About The Impact Of Regional Financial Risk On Regional Capital Flow

Regional capital flow is an important factor that affects regional economic development.In the field of economic and regional economic research,capital is regarded as an engine to drive economic growth.Capital as a major factor of production,its stock size and use efficiency affect the development of regional economy.The regional flow of capital may change the size of the capital stock of a region,affect the use efficiency of its capital,and influence the growth of regional economy.The imbalance of regional economic growth could as well lead to regional economic development gap.According to the neo-classical theory,the flow of capital in the world flows from the developed country to the less developed countries.According to this logic,the flow of capital in a domestic region should as well flow from more developed regions to less developed areas.However,the results of the inter provincial capital flows in China show that the capital flow between provinces is not in line with the expectation of the new classical growth theory,even contrary to the conclusion of the theory.In general,the capital flow between provinces in China is mainly flowing from the relatively backward central and western regions to the eastern regions.This "Lucas paradox" of this capital flow is worth thinking deeply.The existing research literatures explain the direction of regional capital flow in China,mostly from the perspective of capital pursuit of high return,namely,capital by profit.However,risk is also the main factor affecting capital flow,especially the financial risk in a region,which has more direct impact on regional capital flow.With the gradual improvement of China's market system,great changes have taken place in the leading forces of capital flows,which have been gradually expanded from a single government department to banks and other financial institutions,enterprises and individuals,including some foreign investment institutions and investors,with the diversification of the capital flow channels.So,is the attitude of capital flow to regional financial risk different under different channels?Is attitude to regional financial risk evading or chasing?Is there any difference between the three eastern and western regions in China?Combined with related literature research,this paper explores the impact of regional financial risks on regional capital flows.First of all,through the analysis of the main channels,the regional capital flows in China are divided into market dominated capital flows represented by domestic financial caliber and foreign capital,and government dominated capital flows represented by public caliber.Then,the comprehensive evaluation index of regional financial risk is constructed by entropy method,and the financial risk status of various provinces in China is measured.China's regional financial risk presents a situation of "High West low East".Based on the panel data of 29 provinces in China in 2005-2015 years,three regression models are constructed.The relationship between regional financial risk and regional capital flow under three caliber is empirically tested by the fixed effect model estimation method.The empirical results show that the market led capital flow is negatively related to regional financial risk,and the government led capital flow is positively related to regional financial risk,that is,the market led capital flow is evading the regional financial risk,while the government led capital flow is the pursuit of the regional financial risk.From the regression coefficient,it can be seen that the capital of foreign capital is more intense than the domestic financial capital on regional financial risk,that is,the degree of disgust on risk is higher.From the eastern and western regions,according to the regression coefficient,the risk aversion of the capital flow of domestic financial caliber and foreign capital in the mid-west part of China is higher than that of the eastern region.There is a significant positive correlation between the capital flow in public caliber region and the regional financial risk,but not in the eastern region.The general trend of regional capital flow in China is the result of the comprehensive role of market led capital and government led capital flow,and the scale of market led capital flows is much larger than that of the government led type.Therefore,the flow direction of regional capital flows in China is ultimately determined by the direction of market dominated flow.Hence,under the situation of "High West low East",China's regional capital flow is flowing eastward.Based on this,this paper explains the "Lucas paradox" of regional capital flow in China under the perspective of regional financial risk.On the basis of theoretical analysis and empirical results,the article puts forward some policy suggestions for reducing the economic development gap between the east and west part of China and promoting the coordinated development of regional economy.