How agglomeration in the financial services industry influences economic growth: Evidence from Chinese cities
AbstractThis paper empirically tests the effect of financial knowledge spillovers on agglomeration in China's financial services industry and examines the external effects on cities' economies. The authors apply hierarchical linear modeling to examine a data set that comprises 276 Chinese cities and draw the following conclusions. Firstly, they find that agglomeration in the financial services industry and the Jacobs spillovers of industry diversification both promote financial knowledge spillovers in terms of industry specialization. Secondly, agglomeration in this studied industry has a significant positive influence on a city's economic growth, while financial knowledge spillovers have a significant but negative effect on a city's economic growth. Thirdly, the tendency towards agglomeration in the financial services industry in a few major cities is clear and the clustering significantly influences cities' boundaries. Finally, China's financial services industry is limited by a serious degree of regulation and is dominated by the main banking institutions. --
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Bibliographic InfoPaper provided by Kiel Institute for the World Economy in its series Economics Discussion Papers with number 2014-6.
Date of creation: 2014
Date of revision:
financial services industry agglomeration; industry specialization; knowledge spillovers; city economies; hierarchical linear modeling;
Find related papers by JEL classification:
- G20 - Financial Economics - - Financial Institutions and Services - - - General
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
This paper has been announced in the following NEP Reports:
- NEP-ALL-2014-02-21 (All new papers)
- NEP-CSE-2014-02-21 (Economics of Strategic Management)
- NEP-EFF-2014-02-21 (Efficiency & Productivity)
- NEP-FDG-2014-02-21 (Financial Development & Growth)
- NEP-GEO-2014-02-21 (Economic Geography)
- NEP-GRO-2014-02-21 (Economic Growth)
- NEP-TRA-2014-02-21 (Transition Economics)
- NEP-URE-2014-02-21 (Urban & Real Estate Economics)
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