Financial Industry Agglomeration,Human Capital and House Price:A Panel VAR Approach

This paper believes there should not be financial discrimination between areas in China which has so many financial industries.The possibility and the transaction cost in the process of making a credit operation are reasons of the heterogeneity of house price fluctuation between areas.Thus,the differences of financial industry agglomeration and human capital between areas should be the direct causes of this heterogeneity.Based on the panel data from 1998 to 2008 of 30 provinces in China,with a panel VAR model,the impulse-response method shows that three variables have positive effects on each other in the east area,in the middle area the shock of human capital has positive effects on other two variables and the other dynamic connections are not prominent or negative,in the west area the shock of house price has negative effects on other two variables and the other dynamic connections are positive.