Research On The Impact Of Chinese Business Environment On Foreign Direct Investment

With the improvement of information technology,transportation facilities and logistics networks,the attention of multinational companies to traditional influence factors which include market,cost and efficiency,when making overseas investments has gradually weakened.Furthermore,the business environment has gradually become the primary consideration for foreign cross-border investment.The Chinese government attaches great importance to the construction of a business environment,which invests a lot of energy in improving the business regulatory framework,and creates a world-class business environment.In the World Bank’s "Business Environment Report 2020",in 2005,China’s business environment ranking has jumped from 92 to 31,and the business environment has been continuously optimized.However,the current business environment in China still has problems such as low overall level and low policy implementation efficiency.With the current slowdown of China’s investment growth and the uneven regional distribution of investment,how to optimize the business environment has a great significance for China to achieve a higher level of opening up,further expand the scale of foreign investment,and improve the quality of foreign investment.Existing literature studies on the business environment and foreign direct investment are mostly based on a certain indicator of the business environment,and less comprehensive consideration is given to the overall level of the business environment and the impact of all sub-indicators on foreign direct investment.Therefore,there are many great theoretical and practical significances to analyze the impact of Chinese business environment on foreign direct investment.Based on the new public management theory and service-oriented government theory,this paper uses the basic analysis tools of econometrics to conduct a theoretical and empirical analysis of the impact of Chinese business environment on foreign direct investment.Firstly,the statistical description and comparative analysis methods are used to analyze the overall level of China’s business environment,sub-indicators and the status of foreign direct investment.Secondly,the impact of the business environment on foreign direct investment was analyzed from three aspects: business environment convenience,rule of law,and internationalization.Thirdly,on the basis of theoretical analysis,the author made an empirical analysis of the impact of China’s business environment on foreign direct investment.Stata statistical software was used to select a random effect model for regression analysis of the total level of business environment and the impact of 8 sub-indicators of business environment on foreign direct investment.Finally,suggestions are made to optimize the business environment and promote foreign direct investment.Through theoretical research and empirical testing,the author drew the following main conclusions:firstly,the business environment has a positive impact on foreign direct investment from the convenience dimension,the rule of law dimension and the international dimension.By reducing the time costs and institutional transaction costs of multinational companies,creating a level playing field,providing a more open market,and other aspects to improve the investment efficiency of multinational companies,reduce the investment risk of multinational companies,and enhance the adaptability of multinational companies.Secondly,the higher the overall level of China’s business environment,the more it will contribute to the inflow of foreign direct investment.Among them,the six indicators of processing construction permits,property rights registration,tax payment,protection of minority investors,access to credit and cross-border trade have a positive impact on China ’s foreign direct investment inflows,while the establishment of enterprises and bankruptcy management of foreign direct investment inflows show Negative impact effect,so this article believes that whether in the convenience dimension,the rule of law dimension or the international dimension,the business environment reform should be implemented,especially the focus on the rule of law dimension of the business environment reform.