Impact of financial reform on urban resilience: Evidence from the financial reform pilot zones in China

Financial reform serves as a crucial measure for implementing structural reforms in the supply side of finance, with the aim of improving the financial system and financial services. Undoubtedly, it can enhance the competitiveness and sustainable development capabilities of cities. However, little is known about whether and how the financial reform pilots (FRPs) implemented in China since 2012 have affected urban resilience. Therefore, this paper treats FRPs as a quasi-natural experiment and uses the DID model to investigate the impact of financial reforms on urban resilience. Subsequently, heterogeneity effects, transmission mechanisms, spatial spillover effects and superimposed policy effects are also further discussed. Empirical results demonstrate that: (1) FRPs can enhance urban resilience and this fact has been confirmed by various robustness tests. (2) Regarding sub-resilience, FRPs can substantially improve economic, social, and infrastructure resilience without any obvious effect on ecological resilience. (3) Technological innovation and industrial agglomeration are vital channels through which FRPs affect urban resilience; and the resilience-enhancing effects of FRPs are more prominent in core cities, cities with advanced development of internet finance, and higher levels of marketization. (4) FRPs exhibit positive spatial spillover effects and enhance the resilience of surrounding cities. Meanwhile, FRPs and broadband China pilots (BCPs) have a positive cumulative effect on improving urban resilience. Overall, this paper illuminates the importance of financial reform in fostering urban resilience, and provides valuable recommendations for financial reform and the development of resilient cities.