Abstract: Analyzing the effects of financial agglomeration on productivity growth and urban-rural income cap can provide corresponding policy recommendations for the unification of efficiency and equality from the perspective of financial development. Based on the data of China's 285 cities in 2003-2014, the effects of financial agglomeration on urban overall productivity growth and urban-rural income gap are analyzed using a dynamic spatial panel model. The results show that although financial agglomeration is an important force to promote urban overall productivity growth, it is also a key factor that leads to the widening of urban-rural income gap. This is mainly because that financial agglomeration can significantly increase the per capita income level of urban residents, but the effect of financial agglomeration on the increase of the per capita income level of rural residents is not significant. The policy implication of this paper is that before the arrival of the spread stage of financial agglomeration, financial policies that aim to alleviate the urban-rural income gap may inhabit urban overall productivity growth.

Key words: financial agglomeration, productivity growth, urban-rural income gap, dynamic spatial panel model