Abstract
This article attempts to fill important knowledge gaps to explore the spatial spillover effects of financial markets on regional financial efficiency in eight economic zones using three-stage superefficiency data envelopment analysis (DEA) and Durbin’s spatial econometric model. The average financial efficiencies in the North coast, East coast, and South coast economic zones reach the superefficiency DEA relatively efficient level, while the average financial efficiencies in the Northeast, Middle Yellow River, Middle Yangtze River, and large West-south and West-north economic zones reach the superefficiency DEA relatively inefficient level. Except for the North coast economic zone, seven equity markets have significant impacts on regional financial efficiency, and local equity markets in the Northeast, South coast, Middle Yellow River, and Middle Yangtze River economic zones generate significant spatial spillover effects on neighboring regions’ financial efficiency. Local credit markets only in the Northeast and South coast economic zones have significant spatial spillover influences on neighboring regions’ financial efficiency. Debt markets in the North coast, East coast, South coast, Middle Yangtze River, and large West-south economic zones have significant influences on regional financial efficiency, and local debt markets in the East coast and Middle Yangtze River economic zones generate significant spatial spillover effects on neighboring regions’ financial efficiency.
Highlights
Understanding the financial market development and regional allocation efficiency of financial resources in China is a topic of increasing interest among policymakers and academic scholars
To the best of our knowledge, we address the gap in prior research by investigating the spatial spillover effects of the financial market on regional financial efficiency in eight economic zones. is article contributes three novelties to the existing literature
We present the spatial Durbin model (SDM) to measure the spatial spillover effects of fiscal decentralization and financial market development on regional SE financial efficiency among eight economic zones. e spatial spillover effects of regional SE financial efficiency are influenced by equity market, debt market, and credit market development and by foreign direct investment, local economic development, financial marketization, and foreign trade policy, among others. e SDM is defined as follows: n n
Summary
Understanding the financial market development and regional allocation efficiency of financial resources in China is a topic of increasing interest among policymakers and academic scholars. In China, different local governments exhibit significant divergence in financial resource competition and financial market development. Such divergence influences financial resource allocation efficiency and spatial spillover effects among different regions. Different economic zones that exhibit greater divergence in the economic development level, financial market development and financial resource allocation, interregional spatial dependence, and spillover effects are important forces for promoting regional financial efficiency. E main objective of this article is to explore the spatial dependence and spillover effects of equity market, credit market, and debt market development on regional financial efficiency in eight economic zones. This article reveals greater divergence in the significant effects of equity, credit, and debt markets on regional financial efficiency in eight economic zones.
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