Abstract： The nature of industrial agglomeration is the gathering of entrepreneurs. When the labor force in the original enterprises to a certain accumulation of knowledge makes the benefits to become entrepreneurs than their current earnings， it will choose to establish new enterprises， and thus endogenize the size of industrial agglomeration. The new company is bound to involve investment， if the investment exceeds its own wealth， which would inevitably take funding from the financial markets， then financial markets plays an important role in the entrepreneurial formation and industrial agglomeration. This paper first theoretically expounded the industry gathering caused by entrepreneurs’ formation， combined with China’s 20 provinces panel data confirmed the existence of this theory， The area with higher of efficiency of financial markets will have relatively higher entrepreneurs density and the industrial agglomeration will also be relatively significant.
Keywords： entrepreneurs’ formation； financial market； industrial agglomeration