It is this reason that promotes the rise of new economic geography. The key to the new economic geography is Krugman's increasing returns to scale (199 1). The core idea is that the natural conditions and geographical location are very close to each other, or it may be caused by some accidental factors (such as historical events), resulting in regional differences. At the same time, the new economic geography began to consider the economic, historical, cultural and institutional factors that were not involved in traditional geography (Yeung, 2003). However, policy factors, like traditional geographical factors, are often analyzed as accidental events, and they are regarded as indirect rather than direct impacts on economy and finance (today, Zhao Chen, Minglu, 2006). In China, economic policies and traditional geographical factors often do not indirectly affect economic and financial development, but directly play a role. China's policy of "getting rich first" has played an undeniable and direct role in the development of the eastern region. Therefore, the analysis framework of this paper includes the influence of economic policy factors.
Financial geography is developed on the basis of new economic geography, which inherits the characteristics of new economic geography beyond the traditional geographical framework to analyze problems, develops a more comprehensive perspective to analyze problems, emphasizes interdisciplinary research, and studies the development of regional finance from the perspectives of politics, economy, culture and history. From this perspective, traditional geographical factors, new economic geographical factors and policy factors are all included. Jin Hotan-Lin (2004) made a preliminary attempt at empirical research in this field, and constructed an evaluation system of regional financial competitiveness from the comprehensive perspective of financial geography, with its index system covering economy, culture, science and technology, location and other aspects. This paper attempts to construct a framework of financial geography and analyze regional financial development from the perspective of financial geography. Under this framework, the influencing factors of regional financial development are mainly divided into three categories: economic geography, new economic geography and economic policy.
Second, the descriptive analysis of regional financial development in China
We use financial correlation rate (FIR) and financial marketization rate (FMR) to measure the degree of regional financial development. Financial Correlation Ratio (FIR) proposed by Goldsmith has been widely used as an index to measure the regional financial development. For a long time, China's state-owned finance has a strong administrative color. In order to better reflect the factors that affect China's regional financial development, we deliberately use another indicator-financial marketization rate (FMR) to reflect the development of non-state-owned finance (Zhou Li, 200 1). FIR is defined as the ratio of the value of all financial assets to the value of all physical assets (that is, national wealth), which is the broadest index to measure the relative scale of financial superstructure.
FMR is the ratio of financial assets of non-state-owned financial institutions to national wealth. If S stands for deposit, L stands for loan and FIR stands for financial correlation rate, then the calculation formula is: FIR = (S L)/GDP. This method will also be used to calculate the following financial correlation ratio. The corresponding financial marketization ratio FMR is the ratio of the sum of deposits and loans of non-state-owned banks to GDP (Zhou Li, 200 1).
The regional financial development level in China has obviously changed in time and space, and the change of FMR, which represents the non-state-owned financial development level, is more obvious than that of FIR, which represents the overall financial development level. We will analyze the influencing factors of regional financial development level change from the perspective of financial geography.
Third, empirical analysis.
We use mixed regression model and unobserved effect model to analyze the panel data. In order to better explain the problem, we will model and analyze the overall development level of regional finance and the development level of regional non-state-owned finance respectively.
(1) Variables and data According to the previous analysis, the factors affecting regional financial development are divided into three categories: 1. Traditional geographical factors. According to the geographical location and the tradition of regional research, we divide 30 provincial administrative units into three regions: east, middle and west. Set two dummy variables, region2 and region3, to represent the central and western regions respectively. 2. New economic and geographical factors. According to the previous studies of Henderson( 1974), Krugman( 199 1), Jin, Tian Lin (2004) and the characteristics of financial geography, we consider the following aspects for the new economic geography factors affecting regional financial development: (1) industrial spillover effect. It is expressed by the proportion of regional tertiary industry output value to regional GDP. (2) Regional human capital level. We use the number of local college students per 100 people (hcap). (3) the level of informatization. We use the total amount of local post and telecommunications services (comm) to represent the level of informatization. (4) Transportation conditions. We use regional highway mileage (total length of highway) to reflect it. (5) the level of science and technology. We use the number of local patents approved in that year to reflect. (6) Cultural factors. We use the consumption proportion (consu) of local urban residents except clothing, food and housing to reflect the consumption culture of a region (Jin, Tian Lin, 2004). (7) Historical factors. The per capita GDP index (perg DP 97) 1997 in this area is used to reflect the historical and economic situation of a region. 3. Economic policy. This paper mainly considers the influence of policies from the following angles: (1) The degree of government participation in economic activities. We use the proportion of local fiscal expenditure except education, administration and capital construction (government) (Yujin, Zhao Chen, Minglu, 2006). (2) openness. Foreign trade dependence index is often used to study the degree of opening up, but in order to avoid endogenous problems, we choose China's preferential policies for opening up (Sylvie Démurge, 2002; Zhang Xueyong et al., 2006) to reflect the degree of openness. (3) Monetary policy. China's unified monetary policy has different impacts on different regions (,Zhong,, 2006). We use the benchmark deposit interest rate level of the central bank to reflect the strength of monetary policy. We select the data of 1997-2004 for analysis. On the one hand, before the early 1990s, the development trend of non-state-owned finance in China was not obvious; On the other hand, frequent use of interest rate policy after 1996 may have an impact on the level of regional financial development. Variable data come from China Economic Information Network Regional Yearbook, China Financial Yearbook, China Statistical Yearbook, and New China 50-year Statistical Data Compilation.
1. Geographical location in traditional economic geography factors has no significant influence on the overall financial development level of various regions in China, but it has a significant influence on non-state-owned finance. China's finance and China's finance account for a relatively large proportion, and the strong administrative color does not conform to the normal market rules. Financial development in economically developed areas is not high, and financial development in economically backward areas is not necessarily backward. However, the development of non-state-owned finance is bound to be limited by the geographical position of the western region, which has a high degree of non-state-owned finance and is in an unfavorable geographical position. 2. New economic geography factors have an important impact on regional financial development. (1) Among them, human capital, informatization level and historical and economic foundation have a very significant positive impact on the overall regional financial development and non-state-owned financial development. (2) The consumption culture in this region has a significant positive impact on the overall development level of regional finance only in the mixed regression model, but not in the random effect model; It also has no significant impact on the development of regional non-state-owned finance. (3) The level of scientific and technological development only shows a positive impact on the overall development level of regional finance in the random effect model, and the statistical results in other models are not significant. It shows that the development of regional finance in China has no obvious dependence on the development of local science and technology. (4) Traffic conditions have no significant impact on regional financial development, because financial development has become increasingly dependent on the level of informationization, and the dependence on traffic conditions has been very weak. (5) In the random effect model, the degree of industrial spillover has a positive effect on the overall development level of regional finance, that is, the more developed the tertiary industry is, the more favorable it is to the development of regional finance. 3. Economic policies have obvious regional effects. (1) The government's participation in the economy has a significant inhibitory effect on the overall development level of regional finance and the development level of non-state-owned finance. It has obvious inhibitory effect on the development of non-state-owned finance in the eastern region, but has no obvious influence on the development of non-state-owned finance in the western region. (2) The regional preferential policies of opening to the outside world have a significant negative impact on the overall financial development level of the region, while the central region has no impact. In terms of influencing the development of non-state-owned finance, the preferential policy of opening to the outside world has a significant promoting effect on the eastern region, but has no influence on the central region and has a negative impact on the western region. The eastern region enjoys the strongest preferential policy of opening to the outside world, and the implementation of the policy has achieved outstanding results; The central and western regions have a low degree of opening to the outside world and have not achieved obvious results. (3) Interest rate policy has obvious regional effects on regional financial development. The interest rate level is negatively correlated with the development of regional non-state-owned finance, but this negative impact is strongest in the eastern region, followed by the central region and the weakest in the western region. The eastern region is more sensitive to interest rates than the central and western regions because of its relatively developed investment awareness, so the role of interest rate policy is more obvious.
Four. This paper constructs a framework to analyze the influencing factors of regional financial development from the perspective of financial geography, and makes an empirical analysis based on the data of China. The research conclusion shows that geographical location has a significant impact on the development of regional non-state-owned finance; The regional human capital level, information level and historical economic base in the new economic geography factors have a significant positive impact on financial development, but the level of science and technology and traffic conditions have no significant impact; Economic policies have differentiated regional effects: the opening-up policy has a significant impact on the development of non-state-owned finance in the eastern region, but not on the central and western regions; Reducing the government's participation in economic activities is conducive to the development of regional finance, especially for the eastern region with a high degree of marketization; The sensitivity of interest rate policy decreases in turn according to the eastern, central and western regions. According to the research conclusion of this paper, we get the following policy enlightenment: First, formulate differentiated policies according to different situations in different regions. The policy of opening to the outside world has played a very good role in promoting the financial marketization in the eastern region and can be maintained, but it has not played a significant role in promoting the financial development in the central and western regions. Therefore, other ways should be taken to promote the financial development in the central and western regions and improve the level of financial marketization. Second, in order to promote regional financial development and improve the level of financial marketization, it is necessary to reduce the government's participation in economic activities, especially in areas with high degree of economic marketization, and give full play to the initiative of market players. Third, in order to better promote regional financial development, it is necessary to implement differentiated interest rate policies. Lower interest rates can promote regional financial development. The financial development in the eastern region is most sensitive to the level of interest rate, so interest rate can be used as a good policy tool to adjust the financial development in the eastern region. For the central and western regions, the influence degree is weakened in turn, but the influence is still significant. Therefore, in order to use differential interest rate policy to promote regional financial development, the interest rate level should be raised in the order of east, middle and west, so as to play a good role.
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