Research On The Impact Of Business Environment On Regional Economic Growth In China

In the early stages of reform and opening up,China implemented a strategy of prioritizing regional development,establishing four special economic zones and four coastal economic open zones,advocating for promoting wealth before wealth,but at the same time,it brought about problems of wealth gap and regional differences.Since 2000,the country has begun to attach importance to the development of the central and western regions,and has implemented a series of strategies such as "Western Development","Central Plains Rise",and "Northeast Area Revitalization Plan".As resources gradually move closer to the central and western regions,the policy dividend of the eastern region has been continuously diluted,but the problem of uncoordinated regional development has not been well solved,and regional economic growth has not been significantly improved.Therefore,a business environment is a new way out.In recent years,governments at all levels at the national and local levels have attached great importance to the continuous improvement and optimization of the business environment,promoting stable and sustainable economic development by creating a favorable business environment.The report of the 20th National Congress of the Communist Party of China pointed out the need to "improve the basic system of market economy such as property rights protection,market access,fair competition,and social credit,optimize the business environment," and create a market-oriented,legal,and internationalized first-class business environment.Based on this,this study will explore the causal effects of business environment on regional economic growth in China from the perspective of business environment.This article uses panel data from 2013 to 2021 for 30 provinces in China(excluding Tibet,Hong Kong,Macao,and Taiwan)to construct an evaluation index system for the business environment.The evaluation system includes five aspects: government affairs environment,market environment,infrastructure,human resources environment,and living service environment.The evaluation index of each province is used as a proxy variable for the explanatory variable.The economic growth of each province is used as the dependent variable,with per capita GDP as the proxy variable for economic growth.The fixed-effect model is used to explore the causal effect of the business environment on regional economic growth in China.Furthermore,based on the regional division standard of the National Bureau of Statistics and macroeconomics,the 30 provinces are divided into three regions: the eastern,central,and western regions,to analyze the heterogeneity between the business environment and regional economic growth in China.To alleviate endogeneity problems,the study uses the opening of ports and trade history as an instrumental variable for two-stage least squares estimation.Finally,innovation is selected as the mediating variable to explore the mechanism of the impact of the business environment on regional economic growth in China,with the number of authorized patents per 10,000 people used as the proxy variable.Research shows that:(1)The impact of business environment on regional economic growth in 30 provinces of China(excluding Tibet,Hong Kong,Macau and Taiwan)is positive and significant.After using the opening of ports and trade as an instrumental variable for regression,this conclusion still holds.(2)The effect of business environment on regional economic growth in China varies across regions.The positive effect of business environment in the eastern region on regional growth is significant,while the positive effect in the central and western regions is not significant.(3)Innovation,as an intermediate variable,promotes regional economic growth in China by improving the business environment.The business environment not only directly affects the development of China’s regional economy but also indirectly promotes it by fostering innovation.Based on empirical research results,this article believes it is necessary to conduct in-depth research on the relationship between the business environment and regional economic growth in China.Based on the differences in the construction of the business environment and the level of economic growth in different regions,corresponding regional development policies should be formulated to provide references for high-quality regional development.Firstly,it is necessary to create a more relaxed and orderly business environment,improve the fairness and transparency of market competition,reduce the operating costs and risks of enterprises,stimulate entrepreneurial spirit and innovation consciousness,and enhance the vitality and resilience of economic growth.Secondly,a scientific and unified business environment evaluation mechanism should be established to help standardize and improve the existing business environment evaluation standards and methods and achieve fair,just,and scientific business environment evaluation nationwide.Thirdly,it is necessary to formulate business environment development strategies according to local conditions.Each region should formulate and implement business environment development strategies that suit its own needs based on its actual development situation,so as to enable the advantages of the central and western regions to be fully utilized and continuously narrow the gap with the eastern regions.Fourthly,regulatory systems that are conducive to balanced regional development should be introduced.The state can increase the protection of property rights,establish more fair and reasonable thresholds,establish a sound government regulatory system,improve the overall level of business environment construction,and promote coordinated development of the national regional economy.