Research On The Effects Of The Financial Geographical Structure On Financing Constraints Of The Companies In Non-Centrat Cities

At present,the supply of financial resources in China presents a trend of concentration toward financial center cities.Financial centers are concentrated in Beijing,Shanghai and Shenzhen,provincial financial centers are concentrated in provincial capitals,while newly developed cities' financial resources is insufficient.The supply of financial resources presents a geographically unbalanced situation.Faced with the unbalanced financial development system,how to optimize the financial system to serve economy and solve the problem of financing constraints has been a difficult problem.In addition,due to the sluggish economy in recent years,the development of companies is stagnated and the return rate on investments continued to decline.The companies,especially those which located in non-central cities,have more difficulties when seek financial institutions so as to they face tougher financing constraints.It is also one of the hot topics discussed by the academic community.The academic research on the above issues mainly focuses on the industrial structure of financial development.There is a lack of exploration on financial geographical structures,and less attention has been paid to the companies located in non-central cities.In fact,companies in non-central cities play an important role on increasing the employment population and promoting local economic development.This paper focused on the financial geographical structure which included the development of local finance and the development of provincial financial centers.We chose financing constraint to describe the financing difficulties.The research process of this paper is as follows:Firstly,combing the theory of corporate finance constraints,financial structure and financial geography.Then analyzed the theoretical logic of financial geographical structure.Secondly,analyzed the influence mechanism of financial geographical structure on the financing constraint of non-central cities.And put the local government's administrative control,the barriers when financial resources flowing into consideration,so as to establish a complete analytical framework.Thirdly,in the empirical part,we introduce the micro-data of companies in non-central cities to construct indicators such as financing constraints,local financial development,and the spillover effect of provincial financial center development.Then established models for total regression and group regression.The empirical test results showed that the local financial development and provincial financial center development in non-central city enterprises can both significantly ease financing constraints of the above companies,but this mitigation effect will be different for different property rights and different regions.For state-owned companies,their financing constraints are significantly affected by local financial development.The financing constraints of private companies and other types of companies are significantly affected by provincial financial centers.For companies in different regions,the local financial development and the development of provincial financial centers in the eastern region have both significantly eased the financing constraints of non-central cities' companies.In the western region,only development of the provincial financial center has significantly eased the financing constraints of non-central cities' companies.In the northeast region,only the local financial development of non-central cities' companies has significantly eased the financing constraints of local companies.The conclusion of this paper fully shows that financial geographic structure has indeed eased the financing constraints of non-central cities' companies.However,due to factors such as the administrative regulation of local governments and the barriers when financial resources flowing,the above-mentioned impacts will vary with the company's property rights and the located regions.Therefore,in the background of China's current financial geography,in order to solve the financing difficulties of non-central cities' companies,the government should focus on optimizing the local financial supply in non-central cities,better planning and building provincial financial centers,and promoting financial marketization reforms.The geographic structure of resource supply should be better adapted to the needs of the company's commands.This is a necessary part of the current financial supply-side reform process,we should not to be neglected.