The role of financial drivers on regional economic resilience: Does information technology level matter?
DOI:
https://doi.org/10.58567/jie01020001Keywords:
Financial drivers, Regional economic resilience, Spatial agglomeration, Staged analysis, Pathway analysis, Regional heterogeneityAbstract
Economic globalization has intensified economic volatility around the world, and the importance of economic resilience has become increasingly prominent in the face of rising uncertainty due to frequent domestic and foreign shocks. Based on provincial panel data in China from 2008-2019, a comprehensive indicator system is constructed to measure regional economic resilience (RER), and the impact of financial driver (FD) on RER is explored from staged, pathway and non-linear perspectives. The main findings are as follows. (1) Both national and regional levels of FD and RER show an upward trend, and the impact of FD on RER has an “inverted-U” shape: as the capacity of FD increases, its impact on regional economic resilience shifts from promoting to inhibiting. The RER has significant spatial agglomeration characteristic. (2) Interestingly, staged analysis shows FD can significantly promote RER only when it is in the “recovery stage”. (3) The pathway analysis of its effect on regional economic resilience shows the following characteristics: financial scale > financial efficiency > financial deepening. (4) From different regions, there are significant differences in the effect of FD on the promotion of regional economic resilience: central region > western region > eastern region. Finally, the corresponding suggestions were provided.
References
Acheampong, A. O. (2019). Modelling for insight: does financial development improve environmental quality?. Energy Economics, 83, 156-179. https://doi.org/10.1016/j.eneco.2019.06.025
Arestis, P., & Demetriades, P. (1997). Financial development and economic growth: assessing the evidence. The economic journal, 107(442), 783-799. https://doi.org/10.1111/j.1468-0297.1997.tb00043.x
Anselin, L. (1995). Local indicators of spatial association—LISA. Geographical analysis, 27(2), 93-115. https://doi.org/10.1111/j.1538-4632.1995.tb00338.x
Beck, T. (2002). Financial development and international trade: Is there a link?. Journal of international Economics, 57(1), 107-131. https://doi.org/10.1016/s0022-1996(01)00131-3
Beck, T., & Levine, R. (1999). A new database on financial development and structure (Vol. 2146). World Bank Publications. https://doi.org/10.1596/1813-9450-2146
Benhabib, J., & Spiegel, M. M. (2000). The role of financial development in growth and investment. Journal of economic growth, 5(4), 341-360. https://doi.org/10.1023/a:1026599402490
Briguglio, L., Cordina, G., Farrugia, N., & Vella, S. (2009). Economic vulnerability and resilience: concepts and measurements. Oxford development studies, 37(3), 229-247. https://doi.org/10.1080/13600810903089893
Briguglio, L. P. (2016). Exposure to external shocks and economic resilience of countries: evidence from global indicators. Journal of Economic Studies. https://doi.org/10.1108/jes-12-2014-0203
Bristow, G., & Healy, A. (2018). Innovation and regional economic resilience: an exploratory analysis. The annals of regional science, 60(2), 265-284. https://doi.org/10.1007/s00168-017-0841-6
Brown, L., & Greenbaum, R. T. (2017). The role of industrial diversity in economic resilience: An empirical examination across 35 years. Urban Studies, 54(6), 1347-1366. https://doi.org/10.1177/0042098015624870
Cao, L. (2022). How green finance reduces CO2 emissions for green economic recovery: empirical evidence from E7 economies. Environmental Science and Pollution Research, 1-14. https://doi.org/10.1007/s11356-022-22365-6
Cepparulo, A., Cuestas, J. C., & Intartaglia, M. (2017). Financial development, institutions, and poverty alleviation: an empirical analysis. Applied Economics, 49(36), 3611-3622. https://doi.org/10.1080/00036846.2016.1265074
Christopherson, S., Michie, J., & Tyler, P. (2010). Regional resilience: theoretical and empirical perspectives. Cambridge journal of regions, economy and society, 3(1), 3-10. https://doi.org/10.1093/cjres/rsq004
Cui, G. (2021). Can Digital Finance Enhance China's Economic Resilience. Journal of Shanxi University of Finance and Economics, (12),29-41.
Dahiya, S. (2022). Does financial deepening matter for economic growth in Asian economies? Fresh evidence from panel threshold analysis. Global Business and Economics Review, 27(2), 192-208. https://doi.org/10.1504/gber.2022.125044
De Gregorio, J., & Guidotti, P. E. (1995). Financial development and economic growth. World development, 23(3), 433-448. https://doi.org/10.1016/0305-750x(94)00132-i
Demetriades, P. O., & Rousseau, P. L. (2016). The changing face of financial development. Economics Letters, 141, 87-90. https://doi.org/10.1016/j.econlet.2016.02.009
Doran, J., & Fingleton, B. (2018). US metropolitan area resilience: insights from dynamic spatial panel estimation. Environment and Planning A: Economy and Space, 50(1), 111-132. https://doi.org/10.1177/0308518x17736067
Du, M., Hou, Y., Zhou, Q., & Ren, S. (2022). Going green in China: How does digital finance affect environmental pollution? Mechanism discussion and empirical test. Environmental Science and Pollution Research, 29(60), 89996-90010. https://doi.org/10.1007/s11356-022-21909-0
Faggian, A., Gemmiti, R., Jaquet, T., & Santini, I. (2018). Regional economic resilience: The experience of the Italian local labor systems. The Annals of Regional Science, 60(2), 393-410. https://doi.org/10.1007/s00168-017-0822-9
Fang, Z., Gao, X., & Sun, C. (2020). Do financial development, urbanization and trade affect environmental quality? Evidence from China. Journal of Cleaner Production, 259, 120892. https://doi.org/10.1016/j.jclepro.2020.120892
Fernández, A., & Tamayo, C. E. (2017). From institutions to financial development and growth: What are the links?. Journal of Economic Surveys, 31(1), 17-57. https://doi.org/10.1111/joes.12132
Gao, L., Meng, F., & Tian, Q. (2022). Study on the Temporal and Spatial Evolution and Influencing Factors of China’s Economic Resilience——From the Perspective of Digital Finance. Inquiry into Economic Issues, (08), 57-74.
Greenwood, J., & Jovanovic, B. (1990). Financial development, growth, and the distribution of income. Journal of political Economy, 98(5, Part 1), 1076-1107. https://doi.org/10.1086/261720
Gurley, J. G., & Shaw, E. S. (1967). Financial structure and economic development. Economic development and cultural change, 15(3), 257-268. https://doi.org/10.1086/450226
Hallegatte, S. (2014). Economic resilience: definition and measurement. World Bank Policy Research Working Paper, (6852). https://doi.org/10.1596/1813-9450-6852
Han, X., Hui, N., & Song, W. (2014). Can Informatization Improve the Technology Innovation Efficiency of Chinese Industrial Sectors. China Industrial Economics, (12),70-82.
Hill, E., Clair, T. S., Wial, H., Wolman, H., Atkins, P., Blumenthal, P., ... & Friedhoff, A. (2012). Economic shocks and regional economic resilience. In Urban and regional policy and its effects: Building resilient regions (pp. 193-274). Brookings Institution Press.
Hu, X., & Hassink, R. (2017). Exploring adaptation and adaptability in uneven economic resilience: A tale of two Chinese mining regions. Cambridge Journal of Regions, Economy and Society, 10(3), 527-541. https://doi.org/10.1093/cjres/rsx012
Hu, X., Li, L., & Dong, K. (2022). What matters for regional economic resilience amid COVID-19? Evidence from cities in Northeast China. Cities, 120, 103440. https://doi.org/10.1016/j.cities.2021.103440
Jalilian, H., & Kirkpatrick, C. (2002). Financial development and poverty reduction in developing countries. International journal of finance & economics, 7(2), 97-108. https://doi.org/10.1002/ijfe.179
Khan, M., & Ozturk, I. (2021). Examining the direct and indirect effects of financial development on CO2 emissions for 88 developing countries. Journal of environmental management, 293, 112812. https://doi.org/10.1016/j.jenvman.2021.112812
Jalilian, H., & Kirkpatrick, C. (2002). Financial development and poverty reduction in developing countries. International journal of finance & economics, 7(2), 97-108. https://doi.org/10.1002/ijfe.179
Lai, F., Zhu, S., Feng, Q., & Yao, Y. (2021). Effects of Financial Market Information on Firms’ Productivity Under Operating Pressure and Financial Constraints: Evidence From the Chinese Stock Market. SAGE Open, 11(4), 21582440211061377. https://doi.org/10.1177/21582440211061377
Levine, R. (1997). Financial development and economic growth: views and agenda. Journal of economic literature, 35(2), 688-726. https://doi.org/10.1596/1813-9450-1678
Levine, R. (1991). Stock markets, growth, and tax policy. The journal of Finance, 46(4), 1445-1465. https://doi.org/10.1111/j.1540-6261.1991.tb04625.x
Levine, R., & Zervos, S. (1998). Stock markets, banks, and economic growth. American economic review, 537-558.
Liu, H., Islam, M. A., Khan, M. A., Hossain, M. I., & Pervaiz, K. (2020). Does financial deepening attract foreign direct investment? Fresh evidence from panel threshold analysis. Research in International Business and Finance, 53, 101198. https://doi.org/10.1016/j.ribaf.2020.101198
Li, W., Fan, J., & Zhao, J. (2022). Has green finance facilitated China’s low-carbon economic transition?. Environmental Science and Pollution Research, 1-14. https://doi.org/10.1007/s11356-022-19891-8
Loayza, N. V., & Ranciere, R. (2006). Financial development, financial fragility, and growth. Journal of money, credit and banking, 1051-1076. https://doi.org/10.1353/mcb.2006.0060
Ma, L., & Huang, C. (2022). Financial Drivers and Renewable Energy Development——A Dynamic Evolution Analysis Based on Multinational Data. China Industrial Economics, (04),118-136.
Marcos, J., & Macaulay, S. (2008). Organisational resilience: the key to anticipation, adaptation and recovery. Cranfield School of Management, Cranfied University, Manuscript.
Martin, R. (2012). Regional economic resilience, hysteresis and recessionary shocks. Journal of economic geography, 12(1), 1-32. https://doi.org/10.1093/jeg/lbr019
Martin, R., Sunley, P., Gardiner, B., & Tyler, P. (2016). How regions react to recessions: Resilience and the role of economic structure. Regional Studies, 50(4), 561-585. https://doi.org/10.1080/00343404.2015.1136410
Martin, R., & Sunley, P. (2015). On the notion of regional economic resilience: conceptualization and explanation. Journal of economic geography, 15(1), 1-42. https://doi.org/10.1093/jeg/lbu015
Östh, J., Reggiani, A., & Galiazzo, G. (2015). Spatial economic resilience and accessibility: A joint perspective. Computers, Environment and Urban Systems, 49, 148-159. https://doi.org/10.1016/j.compenvurbsys.2014.07.007
Pal, S., & Bandyopadhyay, I. (2022). Impact of financial inclusion on economic growth, financial development, financial efficiency, financial stability, and profitability: an international evidence. SN Business & Economics, 2(9), 1-29. https://doi.org/10.1007/s43546-022-00313-3
Pradhan, R. P., Arvin, M. B., Hall, J. H., & Nair, M. (2016). Innovation, financial development and economic growth in Eurozone countries. Applied Economics Letters, 23(16), 1141-1144. https://doi.org/10.1080/13504851.2016.1139668
Qu, C., Shao, J., & Shi, Z. (2020). Does financial agglomeration promote the increase of energy efficiency in China?. Energy Policy, 146, 111810. https://doi.org/10.1016/j.enpol.2020.111810
Rajan, R., & Zingales, L. (1998). Financial development and growth. American Economic Review, 88(3), 559-586. https://doi.org/10.3386/w5758
Rashid, A., & Intartaglia, M. (2017). Financial development–does it lessen poverty?. Journal of Economic Studies. https://doi.org/10.1108/jes-06-2015-0111
Rewilak, J. (2017). The role of financial development in poverty reduction. Review of development finance, 7(2), 169-176. https://doi.org/10.1016/j.rdf.2017.10.001
Rostow, W. W. (1974). Money and Capital in Economic Development. By Ronald I. McKinnon. (Washington, DC: The Brookings Institution, 1973. Pp. 184. $7.50.). American Political Science Review, 68(4), 1822-1824. https://doi.org/10.2307/1960040
Samargandi, N., & Sohag, K. (2022). The interaction of finance and innovation for low carbon economy: Evidence from Saudi Arabia. Energy Strategy Reviews, 41, 100847. https://doi.org/10.1016/j.esr.2022.100847
Sensier, M., Bristow, G., & Healy, A. (2016). Measuring regional economic resilience across Europe: Operationalizing a complex concept. Spatial Economic Analysis, 11(2), 128-151. https://doi.org/10.1080/17421772.2016.1129435
Shahbaz, M., Nasir, M. A., & Lahiani, A. (2022). Role of financial development in economic growth in the light of asymmetric effects and financial efficiency. International Journal of Finance & Economics, 27(1), 361-383. https://doi.org/10.1002/ijfe.2157
Shahbaz, M., Shahzad, S. J. H., Ahmad, N., & Alam, S. (2016). Financial development and environmental quality: the way forward. Energy Policy, 98, 353-364. https://doi.org/10.1016/j.enpol.2016.09.002
Sugiyanto, C., & Yolanda, Z. (2020). The Effect of Financial Deepening on Economic Growth, Inequality, and Poverty: Evidence from 73 Countries. The South East European Journal of Economics and Business, 15(2), 15-27. https://doi.org/10.2478/jeb-2020-0012
Tang, M., Wang, X., Niu, W., Fu, J., & Zhu, M. (2021). How financial development scale and R&D influence regional innovation efficiency: empirical evidence from the financial industry. Environmental Science and Pollution Research, 1-14. https://doi.org/10.1007/s11356-021-16862-3
Tóth, B. I. (2015). Regional economic resilience: concepts, empirics and a critical review. Miscellanea Geographica. Regional Studies on Development, 19(3), 70-75. https://doi.org/10.1515/mgrsd-2015-0017
Wang, W., Yang, X., Cao, J., Bu, W., Adebayo, T. S., Dilanchiev, A., & Ren, S. (2022). Energy internet, digital economy, and green economic growth: Evidence from China. Innovation and Green Development, 1(2), 100011. https://doi.org/10.1016/j.igd.2022.100011
Wang, X., & Li, M. (2022). Determinants of Regional Economic Resilience to Economic Crisis: Evidence from Chinese Economies. Sustainability, 14(2), 809. https://doi.org/10.3390/su14020809
Wang, Z., & Wei, W. (2021). Regional economic resilience in China: Measurement and determinants. Regional Studies, 55(7), 1228-1239. https://doi.org/10.1080/00343404.2021.1872779
Wang, Z., & Zhao, B. (2019). Analysis of the Threshold Effect of Financial Scale, Structure and Efficiency on Carbon Emissions. Ecological Economy, (11), 28-32+111.
Wen, K. (2017). Threshold Effect of Financial Development and Industrial Structure Optimization under the Background of Chinese Supply Side Structure Reform. Industrial Organization Review, (02),37-51.
Wu, H., Xue, Y., Hao, Y., & Ren, S., (2021). "How does internet development affect energy-saving and emission reduction? Evidence from China," Energy Economics, Elsevier, vol. 103(C). https://doi.org/10.1016/j.eneco.2021.105577
Xie, W., Rose, A., Li, S., He, J., Li, N., & Ali, T. (2018). Dynamic economic resilience and economic recovery from disasters: A quantitative assessment. Risk analysis, 38(6), 1306-1318. https://doi.org/10.1111/risa.12948
Xu, L., & Tan, J. (2020). Financial development, industrial structure and natural resource utilization efficiency in China. Resources Policy, 66, 101642. https://doi.org/10.1016/j.resourpol.2020.101642
Xu, Y., & Deng, H. (2020). Diversification, Innovation Capability and Urban Economic Resilience. Economic Perspectives, (08),88-104.
Xu, Y., Zhao, X., Zhou, X., & Yuan, L. (2021). Financial Structure and Capital Allocation Efficiency: An Empirical Analysis of China from 2005–2018. Applied Economics, 53(29), 3347-3358. https://doi.org/10.1080/00036846.2021.1877256
Yuan, S., Wu, Z., & Liu, L. (2022). The effects of financial openness and financial efficiency on Chinese macroeconomic volatilities. The North American Journal of Economics and Finance, 101819. https://doi.org/10.1016/j.najef.2022.101819
Zhang, X., Zhao, Y., & Jiang, T. (2017). Research on the Impact of Financial Development on Manufacturing Structure Upgrading. Journal of Macro-quality Research, (02), 51-60.
Zhang, Z., & Zhao, R. (2021). Research on the Spatial Spillover Effect of Financial Industry Agglomeration on Regional Economic Resilience. Contemporary Economic Management, (03),89-97.
Zhou, Q., & Han, H. (2020). Research on the Development, Risk and Regulatory of Financial Technology in the Digital Economy Era. Scientific Management Research, (05),148-153.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2023 Xiaoli Hao, Junhong Qu
This work is licensed under a Creative Commons Attribution 4.0 International License.