Does the Improvement of the Business Environment Improve the Innovation Efficiency of Enterprises? Evidence from the Listed Companies in China

Abstract

The quality of the business environment influences the speed and quality of economic development, and optimizing the business environment helps improve enterprises’ innovation ability. This article selects urban business environment and micro-enterprise data of Chinese listed companies from 2013 to 2019. It constructs a comprehensive evaluation index system for the urban business environment in China through the entropy method, exploring the specific path of promoting enterprise innovation ability through the business environment. The empirical results indicate that optimizing the business environment can encourage improving innovation efficiency in enterprises. A good business environment can increase government subsidies and enterprises’ Assumption of risk ability to promote technological innovation. Financing constraints and supply chain concentration can negatively enhance the driving effect of the business environment on enterprise innovation. Heterogeneity analysis indicates that the business environment is more conducive to stimulating the drive for technological innovation among state-owned enterprises, large-scale enterprises, and manufacturing enterprises. This article provides new insights into the relationship between the business environment and the innovation efficiency of enterprises.

Hybrid threats and their impact on the performance of the business environment

“…A good business environment has a more significant impact on large enterprises than on small enterprises. (Han et al, 2023;Straková et al, 2021) The evolution of the business environment varies from country to country; therefore, the business environment gives some countries a competitive advantage. In their paper, Rusu and Dornean (2019) noted that a country must outperform its competitors in research and innovation, entrepreneurship, competition, and education.…”