Business environment optimization and corporate sustainable innovation: Evidence from China

Zhanyong Liang, Kangquan Qiu, Jiakun Zhuang and Qingyang Zhang

Finance Research Letters, 2025, vol. 71, issue C

Abstract: Based on our analysis of samples of Chinese A-share listed companies from 2013 to 2021, we find that optimizing the urban business environment significantly promotes corporate sustainable innovation. This finding remains unchanged after a series of robustness tests. The mechanism analysis shows that business environment optimization improves corporate sustainable innovation by reducing perception of uncertainty, alleviating financial constraints and attracting innovative talent. The heterogeneity analysis further demonstrates that the effect is more pronounced in non-state-owned, large and high-tech companies. This article enriches the research on the influencing factors of corporate sustainable innovation and the economic impacts of business environment optimization.

Keywords: Business environment; Sustainable innovation; Perception of uncertainty; Financial constraints; Innovative talent (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:71:y:2025:i:c:s1544612324014703

DOI: 10.1016/j.frl.2024.106441

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