How does financial institution reform affect regional development models?

This study investigates how financial institution reform (FIR) influences regional development models in China's central and western regions, using panel data from prefecture-level cities between 2007 and 2023. Empirical results indicate that FIR significantly promotes the transformation of regional development models, with its effects varying across different stages of regional development. Additionally, the impact of FIR shows marked heterogeneity depending on regional marketization levels and degrees of government intervention. Mechanism analysis further identifies innovative financial support and entrepreneurial activity as two key channels through which FIR facilitates regional economic restructuring and upgrading. These findings offer empirical evidence for understanding how financial reform contributes to sustainable and high-quality regional development in inland China.