Naresh R.Pandit(200 1, 2002) and other scholars adopted the research method of industrial cluster dynamics proposed by Swann( 1998), and made an empirical analysis of British financial services industry. The conclusion is that the agglomeration effect affects the growth of the company and the number of new entrants, and there is a correlation between different financial departments in the same financial service center. The Economist Advisory Group (1984) pointed out in the article "Twenty Years of Financial City: London's Future as an International Financial Center": "The financial center develops slowly, but once it is established, it shows great vitality. This is partly due to the power of habit, customer loyalty or simple inertia (or "path dependence"), but mainly due to the various economies of scale enjoyed by the establishment of financial centers. " Arthur( 1994) provides a path dependence model to describe the following situations: If the external economy (or agglomeration economy) prevails, how can a particular enterprise become superior to others? He indicated that for a specific financial business, this will make it more attractive to other banks, and these incremental returns will help to "lock in" geographically. In other words, this makes one area better than others. In this mode, as long as new enterprises enter, once the area is selected, it is difficult to move. Taylor(2003) and others made an empirical study on London financial service cluster. The results show that the close interpersonal relationship formed by geographical proximity and face-to-face contact is a crucial process for the sustainable development of London financial service cluster. The localization of the relationship among skilled labor, customers and suppliers is very important for the innovation of financial service enterprises and the delivery of products and services.
Financial geography mainly explains the reasons of financial industry agglomeration from the angle of information. Porteous( 1995) has a series of tools to explain and explain the development of regional financial centers, such as "path dependence" to explain why a city can maintain its advantages in the region for a long time; "Information asymmetry theory" and "information hinterland theory" can explain why the advantages of "path dependence" will be changed or weakened. Gehng( 1998)~] Based on the field friction theory and a large number of empirical analysis, it is proved that the geographical aggregation trend of some financial activities coexists with the geographical dispersion trend of others. In order to understand this seemingly contradictory phenomenon, it is particularly useful to classify financial activities according to information content. Information-sensitive securities transactions are more likely to be concentrated in areas where relevant securities information is more concentrated and easier to exchange, while standardized securities may be more free and more sensitive to cost differences. Zhao used the information hinterland theory to study the financial problems in China. He divided information into standardized information and non-standardized information. It is very difficult to accurately explain the connotation and value of non-standardized information, and it is necessary to accurately understand the broad background (or Japanese culture) of such information.
It is precisely because of the asymmetry of information that the financial sector needs to be close to the information source. The study also points out that information externalities and information asymmetry are not only important factors in shaping the information hinterland and determining the financial center, but also important factors affecting the regional and global levels. Another expression of standardized information and non-standardized information is coded knowledge (1. Edge) and tacit knowledge (tacit knowledge O), which are commonly used in evolutionary economics. Financial geographers borrowed this concept and pointed out that tacit knowledge learning needs face-to-face communication. Therefore, it is impossible for people to completely get rid of the shackles of geographical factors. Davis (1990), through the investigation in the field of financial services, found that in metropolitan areas, large, medium and small financial services tend to form clusters. With the help of professional labor talents and enterprises in other related fields, such as accounting, actuarial science and legal consultation, the financial service industry will be closer to the market, reduce transaction costs and develop innovative technologies through the sharing of knowledge and experience. He pointed out that many external economies are related to good information flow. If the financial market is enlarged on the basis of more accurate and competitive pricing of financial services and financial instruments, its efficiency and liquidity will be higher, and the financial markets are highly correlated, and their correlation will continue to increase.
Risto Laulajainen(200 1) studies the phenomenon of financial industry agglomeration from the perspective of financial resource mobility. He believes that the freely convertible currency or government bonds of an important country are actually a commodity and can be traded equally everywhere. Logically, this kind of transaction tends to big cities with good liquidity, while economists discuss the phenomenon of financial industry agglomeration from the perspective of economic development and urban development theory. In urban economy, the differentiation of urban functions leads to the emergence of hierarchical framework in economic system. Gras( 1922) describes the development stage from rural to urban economy, and studies the services provided by professional financial institutions as the functions of big cities. He described the four stages of the city as hinterland, namely commerce, industry, transportation and finance. The financial industry is at the highest stage of urban development, and it has greater concentration compared with commerce, industry and real estate. Vernon (1960) thinks that cities attract industries and services with great uncertainty and need face-to-face contact, and it is necessary to attract those industries with fast interaction. The concentration of companies or financial institutions can promote the established customer relationship and be familiar with the complex and changeable market demand. New york Port attracts wholesalers, wholesalers bring financial institutions, and financial institutions attract the core institutions of national companies.
Another important reason for the formation of financial industry agglomeration is that enterprises choose the same location, but in the highly competitive industrial environment, only some spaces have spatial elements suitable for the financial industry. This special place is called "the bonding point in smooth space" by Markussen. This unique place, because of its unique spatial location, has become a hotbed suitable for financial industry gathering. Spatial location is the basic element of financial industry agglomeration. Martin (1999) studied the location distribution of different financial institutions, and concluded that the locations of banks, securities trading institutions and foreign exchange trading institutions will be different, the former will be relatively dispersed, while the latter two will be relatively concentrated. Porteous made a good theoretical analysis of the bank location model. By analyzing the model of the influence of distance on the supervision cost of bank loans, he thinks that if the spatial distribution of market potential is uneven and price competition is not considered, bank agglomeration will occur, and the result is similar to hotelling's enterprise spatial analysis model. Cui & Gehrig made a theoretical and empirical study on the causes of major banking centers in the world. Studies have proved that regional trade flow, direct investment scale, distance, cultural differences and the size of local banking opportunities are factors that affect the choice of transnational location of banks, but there is still a lack of empirical tests on the importance of these factors.
E.P.David( 1988) applied the theory of enterprise location to the study of the formation of financial centers for the first time, and systematically combed the theory of enterprise location in 1990. This theory mainly explains why a specific enterprise chooses a specific location among various alternative locations. Under the market economy condition that the hypothesis of "rational economic man" is established, the behavior of enterprises is based on the principle of maximizing profits. He put forward a clear analytical framework, that is, the factors affecting enterprise location can be divided into three parts: supply, demand and external economy, which is the so-called profit maximization model of enterprise location. However, the profit maximization model has shortcomings and is too simplistic. Pan (2002), a Chinese scholar, used the location theory to analyze the important determinants of financial institutions' location decision: 1. Regional cost advantage; 2. The scale and quality of human resources; 3. Advanced, safe and reliable telecommunication facilities; 4. Financial regulatory environment and tax system. From the above literature review of the causes of financial industry agglomeration, it can be seen that domestic and foreign scholars still lack of in-depth and systematic discussion on the agglomeration theory of financial industry characteristics, but only analyze the specific factors that promote the formation of agglomeration, and the research on these specific factors is also scattered, lacking a systematic model. Therefore, in general, the research on the internal mechanism of financial industry agglomeration is not deep enough, and it needs systematic theory and model to integrate.