The Research on Coupling Coordination Development between China's Provincial Financial Agglomeration

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Frontiers in Finance Volume 1, 2015 doi: 10.14355/ff.2015.01.007

www.seipub.org/ff

The Research on Coupling Coordination Development between China's Provincial Financial Agglomeration and International Trade Yiqing He1, Qiong Yang2, Weihua Xu3 1.

Financial Securities Research Institute, Nanchang University, Nanchang 330031, China

2.

School of Economics and Management, Nanchang University, Nanchang 330031, China

3.

School of Science, Nanchang University, Nanchang 330031, China

1564602392@qq.com Abstract On the analysis of the interaction effect between financial agglomeration and international trade and by borrowing coupling

theory in physics, we use the improved entropy method to construct the coupled evaluation model about the system of financial agglomeration and international trade, which spans a period from the year of 2005 to the year of 2013 of 31 provinces, autonomous regions and municipalities of mainland China. The results of clustering analysis indicate that there exists coupling relationship of interaction and mutual constraints between financial agglomeration and international trade. In these 31 regions, coupling coordination development type spans six grades, and the coupling coordination degree of the eastern regions is much higher than that of the mid-western regions. With the deduction of time, the provincial general trend is transforming to a higher type of coupling coordination development. Especially, the coupling coordination degree of the middle regions (Jiangxi, Anhui, Henan, Hunan and Hubei) and the western regions (Sichuan, Chongqing, Yunnan, Guangxi and Xinjiang) has a clear upward trend. Keywords: Financial Agglomeration; International Trade; Coupling; the Improved Entropy Method

Background With the deepening of international division of labor and the accelerating process of economic globalization, finance and international trade gradually merge, both inside and outside the area. Since China's reform and opening up, the scale of China's international trade is continuously expanding, and the foreign trade dependency continues to increase. With China's GDP reaching $4.303037 trillion in 2014, the foreign trade dependence was 41.53%. In the financial field, in 2014, China's financial added value stepped up to 2.98257 trillion Yuan and the sum of the financial institutions’ lending and deposit at the end of the year was 195.541465 trillion Yuan. At present, China’s financial agglomeration development still lags behind that of the western developed countries, the financial structure is not perfect enough, financial efficiency is still relatively low, and the function of the financial system doesn’t show enough. So the research about the inner link between financial agglomeration and international trade, exploring the right path of financial agglomeration’s effect on the scale and structure upgrading of international trade, has important theoretical and realistic significance to realize the sustainable development of China's international trade and promote the deepening reform of the financial system. Literature Review Foreign scholars do the research on the relationship between finance and trade earlier, and acquire rich achievements. Alan M,Taylor(2011)[1], Kojo Menyah(2014)[2] and Jung Hur[3] found the result that there exists

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