Research On The Mechanism And Differential Analysis Of The Impact Of Financial Development On Urban Economic Growth In Various Cities Of Anhui Province

Financial development is the core of economic growth,and the financial development of a city is the driving force for its rapid economic growth,as well as the core part of the city’s economic operation.The continuous development of urban finance will provide strong support for its economic growth and inexhaustible development momentum.By the end of 2021,there were nearly 3,000 financial institutions in Anhui Province,including various banks,securities companies,insurance companies,and other financial institutions.Although the overall financial development level of Anhui Province has been continuously improving and its support for the provincial economy has become increasingly significant,there are still differences in the financial development level and economic growth status of various cities within the province.This is not conducive to the balanced development of cities within the province.Therefore,it is of great significance to carry out research on the mechanism of financial development on economic growth in various cities in Anhui Province,analyze the differences in development between cities,and promote the coordinated development of cities within the province.First,this paper summarizes and generalizes the existing literature on financial development and economic growth,elaborates on the relevant theories,systematically sorts out the internal relationship between finance and economic development,and selects regional GDP as the dependent variable.Meanwhile,it selects the representative indicator of financial development,the financial-related ratio(FIR),as the core independent variable,and selects government expenditure(GOV),fixed asset investment(FAI),and labor force size(LAB)as general independent variables.Second,the paper conducts a descriptive analysis of the selected variables,and through Pearson correlation coefficient matrix test,multicollinearity test,Hausman test,and F-test,it ultimately decides to use the fixed-effect model for regression analysis.In addition,to enhance the reliability of the empirical results,this paper adopts a stepwise regression method to test the hypothesis.The final experimental results show that there is a significant U-shaped relationship between FIR and GDP,that is,as the FIR increases,GDP first shows a downward trend,and after reaching a certain stage and exceeding a threshold,as the FIR increases,GDP also increases accordingly.Finally,this article cites the variable coefficient model to focus on analyzing the differences in the impact of FIR on GDP among different cities in Anhui Province.At the same time,after using the 2SLS instrumental variable model and the system GMM method to eliminate possible endogeneity issues between explanatory variables,this article also applies first-order and second-order lag treatments to all explanatory variables,respectively The robustness test was carried out by removing special samples and replacing estimation methods,and the conclusion was drawn that there was a significant and robust U-shaped relationship between FIR and GDP in Anhui Province as a whole;For different cities,there is a different U-shaped relationship between FIR and GDP,with some cities having a positive U-shaped relationship,some cities having an inverted U-shaped relationship,and some cities having a linear relationship.Based on this conclusion,corresponding countermeasures and suggestions are proposed for the differences in the relationship between FIR and GDP among different cities.