The Association between Business Climate, Happiness, and Corporate Profitability

Abstract

Business and investment in any area requires the provision of an appropriate and secure institutional environment.One of the factors that helps to expand businesses and increase corporate profits is the right business environment. Avoidingcomplicated administrative bureaucracy, lending and credit, proper international trade, and the ease of obtaining the necessarypermits will be helpful in this regard. On the other hand, businesses can perform better in a happy and stress-free environment.Happiness is an emotional state characterized by feelings of joy, satisfaction, contentment, and fulfillment. While happiness hasmany different definitions, it is often described as involving positive emotions and life satisfaction. The purpose of the presentstudy is to investigate the relationship between the business environment and happiness indicators with corporate profitability.For this purpose, 175 top companies in the world from 2013 to 2018 that were profitable among the top 500 companies each yearwere selected as the statistical population. World Happiness annual report, Doing Business annual reports, and Fortune site wereused to collect the data. Also the data analysis was done according to the panel data method using Stata software. The resultsshows that in general, there is a positive relationship between business environment and happiness indicators corporateprofitability.