지역금융의 현황과 지역경제에 미치는 역외유출의 영향

Finance and the Effect of Its Outflows on the Regional Economy in Korea

Regional finance is an important factor in regional development, and this paper examines the current condition of regional finance in Korea, including the extent of contraction and the outflow of local funds. Via the fixed-effect model and system generalized method of moment(system GMM) estimations with the panel data of 16 regions from 2005 to 2013, the paper also explores the spillover effects of regional finance on the financial development and economic growth at the regional level. The levels of financial development and concentration of provincial regions are found to be remarkably lower than those of metropolitan areas. In particular, the contraction and outflow of local funds have been aggravated since the 2008 global financial crisis. It is also found that the contraction and outflow of local funds have a positive correlation and the outflow of local funds can hinder financial development and indirectly weaken economic growth, while financial efficiency can enhance them. This paper contributes to the literature by suggesting the need for policies that minimize the contraction and outflow of local funds in order to promote regional finance and economy by improving the efficiency of the regional financial sector.