Does the Business Environment Improve the Sustainable Development of Enterprises?

Abstract

A good business environment is fertile ground for cultivating the high-quality development of enterprises and is an important guarantee for an enterprise to achieve sustainable development. Using A-share listed companies in China from 2010 to 2020 as the research sample, the research objective of this paper is to empirically test the impact of the business environment on the sustainable development of enterprises from the perspective of the high-quality development of enterprise, and it analyzes the impact path from the perspective of enterprise innovation. Using OLS regression, systematic GMM regression, and 2SLS regression for empirical analysis, the results showed that there is a significant positive correlation between the business environment and the sustainable development of enterprises. In other words, the optimization of the business environment is conducive to promoting the sustainable development of enterprises. Enterprise innovation plays a mediating role in the relationship between the business environment and the sustainable development of enterprises. The conclusions of this paper still hold after a series of robustness tests and endogeneity tests. Further analysis showed that, in non-manufacturing listed companies and eastern and western regions of China, the business environment plays a more significant role in the sustainable development of enterprises.

1. Introduction

In September 2015, the UN Sustainable Development Summit adopted the “2030 Agenda for Sustainable Development”, setting out 17 goals for sustainable development [1,2,3]. Sustainable development has become a key issue for national and regional economic development. As an important part of social organizations, enterprises play an important role in promoting economic development and improving people’s living standards [4,5], so it is imperative to promote the sustainable development of enterprises.

A business environment is both productivity and competitiveness [6,7]. A sound business environment is fertile soil for cultivating high-quality enterprises and an important guarantee for enterprises to achieve sustainable development. Due to the impact of COVID-19, the downward pressure on the economy has increased, and business risks have increased, making it particularly important to optimize the business environment. Over the years, especially since the economy entered the “new normal”, the Chinese government has attached great importance to improving the business environment and implemented a large number of reform measures in various aspects, which have achieved remarkable results. On 22 October 2019, the State Council issued the “Regulations on Optimizing the Business Environment”, which established the basic institutional norms for a business environment that treats all types of market players equally, laying the foundation for a legalized business environment. On 24 October 2019, the World Bank released the “Doing Business 2020 report”, which showed that China’s global ease-of-doing-business ranking rose to 31st in the world, ranking among the top 10 economies in the world with the greatest improvements in optimizing their business environments for the second consecutive year thanks to a vigorous reform agenda. What impact does the optimization of the business environment have on the sustainable development of enterprises? How does the business environment affect the sustainable development of enterprises in the process of enterprise operation and development? Does this impact vary significantly among the enterprises of different industries and different regions?

Based on the above questions, this paper selects all A-share listed companies in China from 2010 to 2020 as the research sample to empirically test the impact of the business environment on the sustainable development of enterprises from the perspective of high-quality development. The results show that there is a significant positive correlation between the business environment and the sustainable development of enterprises; that is, optimizing the business environment is conducive to promoting the sustainable development of enterprises; enterprise innovation plays a mediating role in the relationship between the business environment and the sustainable development of enterprises. The conclusions of this paper still hold after robustness tests such as replacing the measurement of independent variables and dependent variables, narrowing the sample selection period, and endogeneity tests such as systematic GMM regression and 2SLS regression. Further analysis shows that in state-owned enterprises, non-manufacturing listed companies, and eastern and western regions, the business environment plays a more significant role in the sustainable development of enterprises.

The possible contributions of this paper are as follows: firstly, exploring the sustainable development of enterprises from the perspective of high-quality development, which provides a new perspective on the sustainable development of enterprises; secondly, from the perspective of enterprise innovation, this paper studies the path of the business environment affecting the sustainable development of enterprises, which enriches the relevant literature and has certain theoretical significance; thirdly, under the background of promoting sustainable development and high-quality economic development all over the world, the research is of strong practical significance for realizing the sustainable development of enterprises and high-quality economic development.

The subsequent structure is organized as follows: Section 2 is a literature review and hypothesis proposal; Section 3 is the research design; Section 4 is the analysis of empirical results; Section 5 is further analysis; and the last part is conclusions and recommendations.

2. Literature Review and Research Hypothesis

2.1. Literature Review

The closely related literature surrounding the study in this paper includes two main categories: the literature related to the business environment and the literature related to the sustainable development of enterprises.

As fertile soil for enterprises to develop and an important foothold in promoting economic transformation, the business environment has attracted gradual attention from academia in recent years, and government departments, universities, and research institutions have increased their research on it. The research related to business environments focuses on three aspects: definition, impact, and optimization. In the definition of the business environment, the World Bank pointed out that the business environment refers to conditions such as the time and cost required for an enterprise to comply with policies and regulations in the process of opening and operating [8]. According to Kolasinski [9], the business environment is the total investment environment for a region, including survival and development. With the deepening of research, scholars further explored the business environment from the perspective of ecosystems, and they put forward the concepts of the entrepreneurship ecosystem [10,11] and the innovation ecosystem [12]. An entrepreneurial ecosystem refers to a cluster that can support and promote entrepreneurial subjects to obtain entrepreneurial resources and provide perfect entrepreneurial supporting hardware facilities and software services [11]. An innovation ecosystem is an economic community with symbiotic relationships and a loose yet interconnected network formed based on long-term trust relationships [12]. From the perspective of ecosystem theory, the business environment can be regarded as a comprehensive ecosystem of the external environment faced by enterprises when engaging in entrepreneurship, innovation, financing, investment, and other activities [13,14]. Some scholars have discussed the impact of the business environment: Acemoglu et al. [15] pointed out that the optimization of business environments plays a vital role in improving the development quality of enterprises, stimulating the vitality of market entities and stabilizing economic development. Bah E H and Fang L [16] and Seker M and Saliola F [17] conducted a comparative study on the business environment of African countries and other developing countries and concluded that there is a positive correlation between the business environment and the total factor productivity of enterprises. Gaganis et al. [18] conducted an empirical study based on data from SMEs in 25 EU countries and found that business environment factors such as corruption, availability of finance, and government intervention have a significant impact on the profitability of SMEs. Basole R C et al. [19] pointed out that entrepreneurial ecosystems are vital sources of innovation and critical engines for economic growth. With the rise of optimizing the business environment as an important strategy for the government, research on the optimal governance of the business environment has gradually increased. The key to optimizing business environments is to focus efforts on learning and innovation in institutional development, technology, and knowledge [20]; improve government efficiency [21]; break down institutional barriers [22]; strengthen capacity building and coordination efforts [23]; and let the market play a stronger role in allocating economic resources. At the same time, administrative reform and judicial reform should be carried out simultaneously to build a market-oriented and law-based business environment [24].

Through a literature review, we found that the existing research on the sustainable development of enterprises mainly focuses on its connotation and influencing factors. The concept of sustainable development was put forward as early as the last century, and the theory of sustainable development was basically established in the early 1990s. The World Commission on Environment and Development (WCED) defines sustainable development as development that meets the needs of the present without jeopardizing the ability of future generations to meet their needs. While scholars have conducted a great deal of research around sustainable development, there is less literature on the sustainable development of enterprises at the microlevel [25]. The concept of enterprise sustainable development is based on the concept of sustainable development, but there is no unified assertion on the definition of enterprise sustainable development. Eirik G. Furubotn and Rudolf Richter [26] believed that the sustainable development of enterprises refers to the consideration of near-term profitability goals and long-term sustainable profitability while producing and operating for profit. Kocmanova et al. [27] argued that the sustainable development of enterprises is a multidimensional concept based on sustainable development. Scholars such as Pedersen [28] considered the stakeholder perspective and argued that corporate sustainability can be broadly understood as the ability to satisfy its own future needs to the maximum extent possible without compromising the interests of its stakeholders. According to Pieloch-Babiarz A et al. [29], the sustainable development of enterprises refers to an improvement in the quantitative and qualitative conditions of running a business, the adoption of pro-ecological standards and solutions, and the support of employee development. A great deal of research has also been carried out on the factors affecting the sustainable development of enterprises. Shang Hua et al. [30] mainly focused on the internal influencing factors of enterprises and concluded that the mission, purpose, regulations, entrepreneurial values, and innovation capability of enterprises are the key factors that determine the sustainable development of enterprises. By studying the relationship between intelligent technology and the sustainable development of enterprises, Saunila M et al. [31] found that intelligent technology is conducive to promoting the sustainable development of enterprises, while the sustainable development strategy of enterprises has a significant mediating effect. Sarkis J et al. [32] found that digital payments, especially mobile payments, are a key priority for SMEs to achieve sustainable development. Siyal S et al. [33] identified CSR practices, organizational culture, and reputation as important factors for improving corporate sustainability. Research by scholars such as Choi S and Lee S [34] and Zhao F et al. [35] also found that the implementation of corporate social responsibility is conducive to the sustainable development of enterprises.

A sound business environment is an important guarantee for enterprises to achieve sustainable development. A review of the existing literature reveals that scholars have conducted a large number of studies on the factors influencing the sustainable development of enterprises, but there are relatively few studies in terms of business environments. Research on the business environment has mainly focused on the impact on macroeconomic or corporate performance. This paper explores the relationship between the business environment and the sustainable development of enterprises, providing a new research direction for the sustainable development of enterprises. In addition, this paper enriches the relevant literature with theoretical significance by examining the paths through which the business environment affects the sustainable development of enterprises from the perspective of enterprise innovation.

2.2. Research Hypothesis

The business environment is a comprehensive ecosystem of the external environment faced by enterprises when engaging in entrepreneurship, innovation, financing, investment, and other activities [13,14]. As an external macro-governance factor, the business environment can affect all economic entities within its scope. Therefore, the optimization of the business environment will have a significant impact on all aspects of the whole life cycle of enterprises [36,37,38].

The theory of institutional economics, especially the theory of transaction costs, points out that market transaction costs are related to a certain system, and the difference between the institutional environment and legal environment will greatly affect the transaction costs of enterprises in the process of operation [39,40,41]. Institutional grouping theorizes that outcomes are produced by a combination of factors and that multiple institutional logics within the business environment ecosystem compete or complement each other to form multiple institutional groupings [42], which, in turn, influence sustainable business development. According to dynamic capabilities theory, faced with different institutional environments, enterprises and executives will make different decisions [43], and these decisions will be directly reflected in differences between the performance and sustainable development of enterprises [9,13,14]. From the perspective of the impact of the institutional environment on the governance effect of corporate investors, a good institutional environment is conducive to the improvement of corporate governance mechanisms and the level of internal control, and, likewise, it is more conducive to corporate investors playing an active shareholder effect to regulate the behavior of corporate executives and to reduce on-the-job spending and the corruption of corporate executives, thus promoting improvements in corporate performance. From the perspective of the impact of the institutional environment on the individual behavior of executives, a cumbersome administrative approval system restrains the entrepreneurial and innovative behaviors of executives to some extent. Reductions in administrative intervention, the shortening of contract execution time, and reductions in the cost of innovation and entrepreneurship motivate executives to actively start businesses [10,11] and make more innovative investment decisions [12,44], thus ensuring the continued healthy and stable development of the company. From the perspective of the impact of the legal environment on corporate R&D innovation, perfect intellectual property protection is an important embodiment of a reasonable legal environment. Strengthening enforcement of intellectual property protection can not only increase the patent output and R&D investment of enterprises but also reduce R&D spillover losses and alleviate external financing constraints, stimulate the motivation of R&D investment, strengthen the intensity of R&D investment, and, thus, improve the innovation ability and development quality of enterprises. Due to the imbalance of regional development, there are big differences between business environments, which are directly reflected in differences between market environments [45,46]. In regions with a better market environment, the government makes fewer interventions and has less control over the allocation of economic resources, and enterprises have less dependence on policy-based resources, which can better attract private investment and increase entrepreneurial activities. The tax activities of enterprises, tax collection, and the administration of governments are more standardized, various economic entities are more active, and enterprises have lower production and operation costs; therefore, the level of corporate performance is higher. In addition, a good market environment is an important external driving force for the technological innovation of enterprises [47,48], and the optimization of the market environment is conducive to accelerating the allocation efficiency of production capital and promoting the industrial upgrading of enterprises. A region with a good business environment usually means fiercer market competition, which forces enterprises to improve their competitiveness, organize their production and sales more efficiently, and improve their services so as to achieve the sustainable development of enterprises. Based on the above analysis, the following hypothesis is proposed:

Hypothesis 1.

There is a significant positive correlation between the business environment and the sustainable development of enterprises; that is, the optimization of the business environment is conducive to promoting the sustainable development of enterprises.

China’s economy has shifted from a stage of rapid growth to a stage of high-quality development, which calls for a shift from the extensive growth model driven by the factors of production and investment to one driven by innovation to improve the quality of development. Innovation is the essence of development [49]. Technological innovation and green innovation can improve the quality of development, bring value-added effects for enterprises and consumers, and reduce the impact on the surrounding environment [50,51] so as to achieve sustainable development. Sustainable development requires a solid micro-foundation, and enterprises are the micro-subjects that improve the quality of economic growth. Therefore, only when enterprises achieve sustainable development can we fundamentally achieve the sustainable development of the economy. Innovation is the fundamental path to achieving the sustainable development of enterprises [52,53]. The resource-based view theory states that the competitive advantage of an enterprise comes from its superior resources [54]. The resource-based view theory explains the ability to provide sustainable competitive advantage through enterprise innovation [55]. By continuously creating resources that cannot be replicated by others through innovation, companies can build an ideal barrier to prevent competitors from entering the market, thus ensuring their competitive advantage and sustainable development. The innovation ability of enterprises is determined by the optimal behavior of the economic participants themselves. However, under the macro background of deep government intervention and the domination of economic development, enterprise innovation may also be affected by the business environment, consisting of many factors in various fields, levels, economic agents, and economic processes. First of all, when the business environment is better, the property rights of enterprises can be effectively protected [56,57], the possibility of erosion and the squeezing of the innovation achievements and innovation benefits of enterprises will be reduced, and the enthusiasm of enterprises to carry out innovation activities will increase [58]. Second, a good business environment means the optimization of the institutional environment, legal environment, and social environment. Enterprises are able to obtain more policy support in terms of talent introduction, tax preferences, and financial subsidies, thus reducing the cost and risk of innovation [59], increasing the motivation and confidence of enterprises to invest in R&D, and promoting the high quality of enterprise innovation and enterprise development. Third, the optimization of a business environment is conducive to reducing relationship-based financing between local governments, listed companies, and the banking sector, thus guiding governments and financial institutions to invest more capital and resources in listed companies, reducing the financing constraints of listed companies [60,61], injecting more capital support into R&D and the innovation of enterprises, and, ultimately, achieving the sustainable development of enterprises. Based on this, the following hypothesis is proposed:

Hypothesis 2.

Enterprise innovation plays a mediating role between the business environment and the sustainable development of enterprises.

3. Research Design

3.1. Data Selection

In 2015, the United Nations Sustainable Development Summit adopted the “2030 Agenda for Sustainable Development”. Considering the comparability of data and the reality that China plans for every five years, this paper selects five years of data before and after 2015, i.e., taking all A-share listed companies in China from 2010 to 2020 as the initial research sample. Most studies have selected data from a certain industry or a certain region, while this paper selects all A-share listed companies in China. The data are mainly obtained from the CSMAR database, and some necessary missing values are collected manually through websites such as Baidu, Sohu, and Sina Finance. The data are screened as follows: exclude financial enterprises such as banks and securities companies; exclude samples of ST, *ST, and PT; exclude samples with missing or outlier data. In addition, in order to eliminate the influence of extreme values on the results, all continuous variables are winsorized at 1% and 99% levels. Finally, 15,984 sample observations are identified, and STATA14.0 is used to process and analyze.

3.2. Variable Definitions

The dependent variable is the sustainable development of enterprises. The definition of the sustainable development of enterprises is mainly developed from the perspective of stakeholder theory and corporate social responsibility, while also following the essence of sustainable development, which is based on three dimensions: environmental, social, and economic [34]. Thus, this paper measures the sustainable development of enterprises from the three perspectives of value creation ability, value management ability, and social responsibility performance. The definition of the specific indicators is shown in

Table A1. Definition of the sustainable development of enterprises.

Primary Indicators	Tertiary Indicators	Interpretation
Value creation ability	Total assets	Natural logarithm of the total assets of the listed company at the end of the period
	Return on equity	Net profit/shareholders’ equity balance
	Net profit growth rate	(Net profit amount of current period − net profit amount of the same period of last year)/(Net profit amount of the same period of last year)
	Net intangible assets	The net amount of the original price of various intangible assets after deducting amortization and impairment provision
	Intangible assets increase rate	Increase in current period/beginning amount of intangible assets
Value management ability	Level of corporate governance	Number of independent directors/total number of directors on board
	Level of internal control	Measured using the Diebold Internal Control Index
Social responsibility performance	Shareholder responsibility	Score of shareholder responsibility in the social responsibility report of listed companies published by Hexun
	Employee responsibility	Score of employee responsibility in the social responsibility report of listed companies published by Hexun
	Supplier, customer, and consumer rights responsibilities	Score of supplier, customer, and consumer rights responsibilities in the social responsibility report of listed companies published by Hexun
	Environmental responsibility	Score of environmental responsibility in the social responsibility reports of listed companies published by Hexun
	Social responsibility	Score of social responsibility in the social responsibility report of listed companies published by Hexun

(see Appendix A). After the indicators are selected, the entropy method is applied to determine the indicator weights and calculate the sustainable development of enterprises.

The independent variable is the business environment. Drawing on the research of related scholars, this paper adopts the marketization index (Market) measured by Fan Gang and Wang Xiaolu et al. [62], with continuous tracking as the measurement variable of the business environment. The higher the marketization index, the better the business environment in the region where the company is located. In addition, drawing on the “Doing Business in Chinese Cities 2020 Report”, published by the Guangdong–Hong Kong–Macao Greater Bay Area Research Institute, the robustness test adopts the business environment index (Index) as a measure of the business environment.

The intermediary variable is enterprise innovation. By reviewing the existing literature, we find that scholars mainly measure enterprise innovation at two levels of input and output. In view of the special institutional background of China, the amount of patent output from the listed companies is not very optimistic, and the timespan of patent applications is relatively long. There may be some defects in using innovation output to measure enterprise innovation. Therefore, enterprise innovation is measured by using enterprise innovation inputs, i.e., by using the standardized total enterprise R&D inputs.

Control variables: By reviewing the existing literature, we find that there are many factors affecting the sustainable development of enterprises. The basic characteristics of enterprises and differences between governance institutions will all have different effects on the sustainable development of enterprises. In view of this, we select the enterprise scale (Size), time of establishment (His), profitability (Roa), debt-paying ability (Lev), development ability (Turnover), ownership concentration (Top1), board size (Board), number of independent directors (Indep), concurrent appointments of chairman and general manager (Dual), and the nature of equity (Soe) as control variables. In addition, the annual effect (Year) and industry effect (Industry) are also controlled. The detailed definition and measurement of variables are shown in

Table 1. Variable definition and interpretation.

Variables	Name	Symbol	Definition or Measurement
The dependent variable	Sustainable development of enterprises	Esd	Composite index constructed using the entropy method
The independent variable	Business environment	Market	Marketization Index of Provinces in China
The intermediary variable	Enterprise innovation	Rd	Total R&D investment of enterprises after standardization
Control variables	Enterprise scale	Size	The natural logarithm of the total number of employees at the end of the period
	Time of establishment	His	The natural logarithm of the difference between the year under study and the year the enterprise was established
	Profitability	Roa	Net profit rate of total assets, that is, the ratio of net profit to total assets at the end of the year
	Debt paying ability	Lev	Asset–liability ratio, that is, the ratio of total liabilities to total assets at the end of the year
	Development ability	Turnover	Total asset turnover rate, that is, the ratio of operating income to the ending balance of total assets
	Ownership concentration	Top1	Proportion of the largest shareholder
	Board size	Board	The natural logarithm of the total number of board members plus one
	Number of independent directors	Indep	The natural logarithm of the number of independent directors in a company plus one
	Concurrent appointments of chairman and general manager	Dual	If the two positions of chairman and general manager are combined, the value is 1; otherwise, the value is 0
	Nature of equity	Soe	If the enterprise is a state-owned enterprise, the value is 1; otherwise, the value is 0

.

3.3. Variable Description

Table A2. Summary statistics.

Variables	Obs	Mean	Median	Std. Dev	Min	Max
Esd	15,984	13.045	10.885	8.084	1.443	25.256
Market	15,984	8.815	9.3	1.765	4.15	11.31
Rd	15,984	−0.038	−0.095	0.210	−0.118	1.493
Size	15,984	7.676	7.561	1.222	3.367	13.165
His	15,984	2.656	2.708	0.453	0	4.771
Roa	15,984	0.052	0.045	0.044	−0.251	1.126
Lev	15,984	0.380	0.364	0.198	0.008	1.352
Turnover	15,984	0.632	0.536	0.466	0.003	9.937
Top1	15,984	0.351	0.335	0.146	0.022	0.891
Board	15,984	2.243	2.303	0.189	0	2.944
Indep	15,984	1.418	1.386	0.137	0	2.197
Dual	15,984	0.301	0	0.459	0	1
Soe	15,984	0.298	0	0.458	0	1

(see Appendix A) lists the descriptive statistical results of all variables. It can be seen that the minimum value of Esd is 1.443, the maximum value is 25.286, and the standard deviation is 8.084, indicating that, on average, there are great differences between the sustainable development levels of the listed enterprises in China. The mean value of Esd is 13.045, which is greater than the median of 10.885, indicating that, in general, the sustainable development level of most listed enterprises in China is lower than the average, and the sustainable development level of enterprises needs to be improved. The minimum value, maximum value, and standard deviation of the business environment (Market) are 4.15, 11.31, and 1.765, respectively, indicating that, on average, the business environment of the listed enterprises is quite different due to the different regions in which they are located. The minimum value of enterprise innovation is −0.118, and the maximum value is 1.493, indicating that there are significant differences between the levels of enterprise innovation; the mean value of Rd is 0.038, which is greater than the median −0.095, indicating that the innovation ability of most listed enterprises is below average, and the innovation level of enterprises needs to be improved.

Through a descriptive statistical analysis of all variables, we find that there are great differences between the sustainable development level and the business environment of the listed enterprises in China. Further, a grouping descriptive statistical analysis is conducted according to the median of the sustainable development level and the region where the enterprises are located.

Table A3. Grouping descriptive statistics according to the sustainable development of enterprises.

Variables	Esd ≤ 10.885			Esd > 10.885			Mean Diff
	Obs	Mean	Std. Dev	Obs	Mean	Std. Dev
Market	7992	8.691	1.804	7992	8.940	1.715	−0.135 ***
Rd	7992	−0.055	0.175	7992	−0.021	0.239	−0.155 ***
Size	7992	7.584	1.157	7992	7.770	1.223	−0.586 ***
His	7992	2.661	0.361	7992	2.652	0.368	0.036 ***
Roa	7992	0.028	0.027	7992	0.076	0.038	−0.072 ***
Lev	7992	0.374	0.199	7992	0.386	0.193	−0.042 ***
Turnover	7992	0.579	0.363	7992	0.686	0.391	−0.102 ***
Top1	7992	0.344	0.143	7992	0.359	0.146	−0.038 ***
Board	7992	2.242	0.174	7992	2.243	0.173	−0.006
Indep	7992	1.418	0.125	7992	1.419	0.126	−0.008
Dual	7992	0.291	0.454	7992	0.310	0.463	−0.043 ***
Soe	7992	0.316	0.465	7992	0.280	0.449	0.083 ***

Note: *** indicate significance at the 10%, 5%, and 1% levels, respectively; the same below.

(see Appendix A) lists the descriptive statistical results grouped by the median of the sustainable development of enterprises. It can be seen that, when the level of the sustainable development of enterprises is less than the median, the mean value of the business environment is −0.081. When the level of the sustainable development of enterprises is greater than the median, the mean value of the business environment is 0.081, and the difference between them is significant at 1%, which preliminarily indicates that the optimization of the business environment is conducive to the promotion of the sustainable development of enterprises. When the level of the sustainable development of enterprises is less than the median, the mean value of enterprise innovation is −0.082; when the level of the sustainable development of enterprises is greater than the median, the average value of enterprise innovation is 0.082, and the difference between them is significant at the level of 1%, indicating that the improvement of enterprise innovation is conducive to promoting the sustainable development of enterprises.

Considering the differences between the regions where the enterprises are located, the next descriptive statistic is divided by regional heterogeneity into the eastern region (region with the earliest coastal opening policy and a high level of economic development), the central region (economically less-developed regions), and the western region (economically underdeveloped western regions).

Table A4. Grouping of descriptive statistics according to the location of enterprises.

Variables	Eastern Region			Central Region			Western Region
	Obs	Mean	Std. Dev	Obs	Mean	Std. Dev	Obs	Mean	Std. Dev
Esd	11,549	13.113	8.029	2559	12.712	8.131	1876	13.079	8.352
Market	11,549	9.598	1.220	2559	7.186	0.750	1876	6.151	1.508
Rd	11,549	−0.035	0.222	2559	−0.040	0.185	1876	−0.056	0.156
Size	11,549	7.615	1.226	2559	7.866	1.191	1876	7.792	1.206
His	11,549	2.635	0.464	2559	2.708	0.414	1876	2.713	0.419
Roa	11,549	0.054	0.044	2559	0.047	0.043	1876	0.046	0.046
Lev	11,549	0.369	0.195	2559	0.403	0.200	1876	0.416	0.207
Turnover	11,549	0.636	0.471	2559	0.667	0.509	1876	0.560	0.353
Top1	11,549	0.351	0.146	2559	0.344	0.146	1876	0.358	0.152
Board	11,549	2.232	0.183	2559	2.265	0.197	1876	2.274	0.210
Indep	11,549	1.411	0.129	2559	1.433	0.149	1876	1.439	0.162
Dual	11,549	0.330	0.470	2559	0.244	0.430	1876	0.196	0.397
Soe	11,549	0.241	0.428	2559	0.424	0.494	1876	0.481	0.500

(see Appendix A) shows descriptive statistics grouped by regional heterogeneity. The number of samples in eastern China is 11,549, about three times the total in central and western China. The average value of the sustainable development of enterprises in the eastern region is the highest at 13.113; the western region is next at 13.079; the central region is the lowest at 12.712, indicating that the sustainable development levels of the listed enterprises vary greatly when the regions are different. The average value of the business environment in the eastern region is the highest at 9.598; the second, in the central region, is 7.186; and the lowest, in the western region, is 6.151. The quality of the business environment in the three regions of China is not completely consistent with the geographical distribution of the level of the sustainable development of enterprises. Therefore, we will use group regression for in-depth analysis.

3.4. Correlation and Collinearity

Table A5. Analysis of correlation.

Variables	Esd	Market	Rd	Size	His	Roa	Lev
Esd	1.000
Market	0.056 ***	1.000
Rd	0.098 ***	0.038 ***	1.000
Size	0.308 ***	−0.051 ***	0.372 ***	1.000
His	0.086 ***	0.116 ***	0.043 **	0.143 ***	1.000
Roa	0.191 ***	0.061 ***	−0.012 **	−0.075 ***	−0.096 ***	1.000
Lev	0.183 ***	−0.057 ***	0.248 ***	0.488 ***	0.211 ***	−0.392 ***	1.000
Turnover	0.045 ***	0.016 *	0.137 ***	0.226 ***	0.044 ***	0.071 ***	0.198 ***
Top1	0.174 ***	−0.033 ***	0.034 ***	0.178 ***	−0.088 ***	0.058 ***	0.080 ***
Board	0.097 ***	−0.101 ***	0.029 ***	0.228 ***	0.053 ***	−0.038 ***	0.164 ***
Indep	0.172 ***	−0.092 ***	0.057 ***	0.275 ***	0.042 ***	−0.051 ***	0.186 ***
Dual	−0.076 ***	0.125 ***	−0.026 ***	−0.181 ***	−0.100 ***	0.083 ***	−0.168 ***
Soe	0.189 ***	−0.216 ***	0.058 ***	0.352 ***	0.196 ***	−0.170 ***	0.338 ***
Variables	Turnover	Top1	Board	Indep	Dual	Soe
Turnover	1.000
Top1	0.088 ***	1.000
Board	0.032 ***	−0.005	1.000
Indep	0.010 *	0.049 ***	0.759 ***	1.000
Dual	−0.065 ***	−0.020 **	−0.148 ***	−0.096 ***	1.000
Soe	0.114 ***	0.201 ***	0.242 ***	0.251 ***	−0.304 ***	1.000

Note: *, **, *** indicate significance at the 10%, 5%, and 1% levels, respectively.

(see Appendix A) shows correlations between the variables. The correlation coefficient between Esd and Market is 0.056 and is significant at the 1% level, tentatively indicating that the sustainable development of enterprises is significantly and positively related to the business environment. The correlation coefficient between Esd and Rd is 0.098 and is significant at the 1% level, tentatively indicating that the sustainable development of enterprises is significantly and positively related to enterprise innovation. At the same time, the correlation coefficients between the dependent variable and control variables are also significant, indicating that the control variables we selected are closely related to the sustainable development of enterprises. The correlation coefficients between the variables are less than 0.5, indicating that the cointegration problem is small, and the variables can be included in the same framework for analysis.

In order to further test the collinearity among the variables,

Table A6. Analysis of collinearity.

Variables	VIF1	1/VIF
Market	1.11	0.902820
Rd	1.30	0.767355
Size	1.80	0.554540
His	1.13	0.886133
Roa	1.32	0.758802
Lev	1.74	0.573680
Turnover	1.15	0.869276
Top1	1.10	0.906386
Board	2.22	0.449539
Indep	2.25	0.443746
Dual	1.13	0.882473
Soe	1.46	0.685385
Mean VIF	1.48

(see Appendix A) shows the results of the VIF test. It can be clearly seen that the maximum of the variance inflation factor between the variables is 2.25, the minimum is 1.10, and the mean is 1.48, all of which are much less than 5, indicating that there is no serious covariance problem between the variables, and they can be included in the same model for empirical testing.

3.5. Model Building

To verify Hypothesis 1, model (1) is constructed. Among the variables, ${\mathrm{Esd}}_{\mathrm{i},\mathrm{t}}$ is the dependent variable for the sustainable development of enterprises; $\mathrm{Control}\_{\mathrm{variables}}_{\mathrm{i},\mathrm{t}}$ are the control variables listed in Table A1; and ${ℰ}_{\mathrm{i},\mathrm{t}}$ is the residual item. In addition, year and industry effects are controlled for at the same time. Pay attention to coefficient ${\mathsf{\beta }}_1$ of ${\mathrm{Market}}_{\mathrm{i},\mathrm{t}}$. If ${\mathsf{\beta }}_1$ is significantly positive, Hypothesis 1 holds.

$${\mathrm{Esd}}_{\mathrm{i},\mathrm{t}}={\mathsf{\beta }}_0+{\mathsf{\beta }}_1{\mathrm{Market}}_{\mathrm{i},\mathrm{t}}+{\mathsf{\beta }}_2\mathrm{Control}\_{\mathrm{variables}}_{\mathrm{i},\mathrm{t}}+\mathrm{Year}+\mathrm{Industry}+{ℰ}_{\mathrm{i},\mathrm{t}}$$

(1)

The mediating effect in Hypothesis 2 is tested by drawing on the causal stepwise regression method proposed by Baron and Kenny [63], which consists of three main steps: first, the regression of the independent variable on the dependent variable; second, the regression of the independent variable on the mediating variable; third, the analysis of the regression of the independent variable on the dependent variable after the inclusion of the mediating variable. Model (1) tests the relationship between the dependent variable and the independent variable. Then, we construct model (2) and model (3) to test the relationship between the mediating variable (${\mathrm{Rd}}_{\mathrm{i},\mathrm{t}}$) and the independent variable, as well as the relationship between the dependent variables, mediating the variable and independent variables, respectively. Among them, $\mathrm{Control}\_{\mathrm{variables}}_{\mathrm{i},\mathrm{t}}$ are the control variables, which is consistent with the control variables in model (1). If ${\mathsf{\beta }}_1$, ${\mathsf{\alpha }}_1$, and ${\mathsf{\gamma }}_1$ are all significant, Hypothesis 2 is confirmed; that is, enterprise innovation does play a mediating role between the business environment and the sustainable development of enterprises.

$${\mathrm{Rd}}_{\mathrm{i},\mathrm{t}}={\mathsf{\alpha }}_0+{\mathsf{\alpha }}_1{\mathrm{Market}}_{\mathrm{i},\mathrm{t}}+{\mathsf{\alpha }}_2\mathrm{Control}\_{\mathrm{variables}}_{\mathrm{i},\mathrm{t}}+\mathrm{Year}+\mathrm{Industry}+{ℰ}_{\mathrm{i},\mathrm{t}}$$

(2)

$${\mathrm{Esd}}_{\mathrm{i},\mathrm{t}}={\mathsf{\gamma }}_0+{\mathsf{\gamma }}_1{\mathrm{Market}}_{\mathrm{i},\mathrm{t}}+{\mathsf{\gamma }}_2{\mathrm{Rd}}_{\mathrm{i},\mathrm{t}}+{\mathsf{\gamma }}_3\mathrm{Control}\_{\mathrm{variables}}_{\mathrm{i},\mathrm{t}}+\mathrm{Year}+\mathrm{Industry}+{ℰ}_{\mathrm{i},\mathrm{t}}$$

(3)

4. Empirical Analysis

4.1. Benchmark Test

Column (1) in

Table 2. Benchmark test.

Variables	Esd	Rd	Esd
	Step 1	Step 2	Step 3
	(1)	(2)	(3)
Market	0.111 ***	0.011 ***	0.099 ***
	(0.000)	(0.000)	(0.000)
Rd			0.0.894 ***
			(0.000)
Size	2.702 ***	0.079 ***	2.688 ***
	(0.000)	(0.000)	(0.000)
His	−0.932	−0.024 ***	−0.831
	(0.216)	(0.000)	(0.129)
Roa	8.635 ***	0.194 ***	8.136 ***
	(0.000)	(0.000)	(0.000)
Lev	5.200 ***	0.017 *	5.399 ***
	(0.000)	(0.090)	(0.000)
Turnover	−1.553 ***	0.003	−1.498 ***
	(0.000)	(0.467)	(0.000)
Top1	0.693 *	0.024 **	0.399 ***
	(0.086)	(0.024)	(0.000)
Board	−0.378 ***	−0.115 ***	−0.262 ***
	(0.000)	(0.000)	(0.000)
Indep	0.138 ***	0.188 ***	0.126 ***
	(0.000)	(0.000)	(0.000)
Dual	−0.263 ***	0.005	−0.274 ***
	(0.004)	(0.133)	(0.003)
Soe	0.142 ***	0.027 ***	0.137 ***
	(0.000)	(0.000)	(0.000)
Intercept	−7.468 ***	−0.735 ***	−8.434 ***
	(0.000)	(0.000)	(0.000)
Control year	Yes	Yes	Yes
Control industry	Yes	Yes	Yes
Observations	15,984	15,984	15,984
R2	0.573	0.304	0.584

Note: The numbers in brackets are “p” of the estimated coefficients; *, **, *** indicate significance at the 10%, 5%, and 1% levels, respectively.

is the basic regression results of the impact of the business environment on the sustainable development of enterprises. The coefficient of Esd and Market is 0.111 and is significant at the 1% level, indicating that the optimization of the business environment can promote the sustainable development of enterprises. Hypothesis 1 is confirmed. In addition, we find that the coefficient of Esd and Size is 2.702 and is significant at the 1% level, indicating that the larger the scale, the more conducive to promoting the sustainable development of enterprises. The coefficient of Esd and Roa is 8.635 and is significant at the 1% level, indicating that the higher the profitability of an enterprise, the more conducive it is to promote the sustainable development of enterprises. The coefficient of Esd and Board is −0.378 and is significant at the 1% level, indicating that the sustainable development of enterprises is negatively correlated with the size of the board.

Columns (2) and (3) in Table 2 are the regression results of the mediation effect test. In column (1), we test the relationship between the dependent variable and the independent variable, which shows a significant positive correlation. Column (2) is the regression result of the independent variable and mediating variable. The coefficient of Rd and Market is 0.011 and is significant at the 1% level, indicating that the business environment is significantly positively correlated with enterprise innovation. Column (3) is the regression result of the total effect. We find that the coefficient of Esd and Market is 0.099, and it is still significant at the 1% level; the coefficient of Esd and Rd is 0.894 and is significant at the 1% level, confirming the existence of the mediation effect. Hypothesis 2 is verified. The optimization of the business environment promotes the sustainable development of enterprises by promoting the improvement of enterprise innovation.

4.2. Robustness Test

4.2.1. Replace Method of the Dependent Variable

To test the robustness of the conclusion, we replace the method of the dependent variable next, and the sustainable growth rate (Sgr) is used to measure the sustainable development of enterprises. Columns (1) and (2) in

Table A7. Robustness test.

Variables	Replace Method of the Dependent Variable		Replace Method of Independent Variable
	Esd		Esd	Rd	Esd
	(1)	(2)	(3)	(4)	(5)
Market	0.019 ***	0.011 ***
	(0.000)	(0.000)
Index			0.132 ***	0.077 ***	0.065 **
			(0.000)	(0.000)	(0.000)
Rd		0.698 ***			0.397 ***
		(0.000)			(0.000)
Control variables	Yes	Yes	Yes	Yes	Yes
Intercept	−1.258 ***	−0.744 ***	−5.324 ***	−2.179 ***	−4.546 ***
	(0.000)	(0.000)	(0.000)	(0.000)	(0.000)
Control year	Yes	Yes	Yes	Yes	Yes
Control industry	Yes	Yes	Yes	Yes	Yes
Observations	15,984	15,984	2330	2330	2330
R2	0.333	0.422	0.530	0.333	0.620

Note: **, *** indicate significance at the 5%, and 1% levels, respectively.

(see Appendix A) indicate the results of the robustness test are consistent with Table 2, which demonstrates the robustness of the model to a certain extent.

4.2.2. Replacement Method of the Independent Variable

Drawing on the “Doing Business in China 2020 Report” (hereinafter referred to as “the Report”) published by the Guangdong–Hong Kong–Macao Greater Bay Area Research Institute, we use the cross-sectional data of A-share listed companies in 2020 to match the total business environment scores of the top 200 cities in terms of the total economic volume published in the Report according to the cities where the companies are located and obtain a business environment index as the measurement of the business environment (Index). After excluding the missing values, 2330 observations are finally obtained. Columns (3) to (5) of Table A7 (see Appendix A) are the regression results after replacing the method of the independent variable. The results are consistent with the benchmark test, which further illustrates the robustness of the model.

4.3. Endogeneity Test

In order to overcome the endogeneity between the business environment and the sustainable development of enterprises, use dynamic panel regression and the instrumental variable method to test the endogeneity next. First, we introduce the lag phase of the sustainable development of enterprises (Esd1) and use system GMM estimation for dynamic panel regression. Columns (1) to (2) in

Table A8. Endogeneity test.

Variables	GMM		2SLS
	Esd	Esd	Rd	Esd
	(1)	(2)	(3)	(4)	(5)
Esd1	0.667 ***	0.694 ***
	(0.000)	(0.000)
Market	0.121 ***	0.103 **
	(0.000)	(0.006)
Mmarket			0.094 ***	0.0.036 ***	0.058 ***
			(0.000)	(0.000)	(0.000)
Rd		0.076 ***			0.739 ***
		(0.000)			(0.000)
Control variables	Yes	Yes	Yes	Yes	Yes
Intercept	−2.362 ***	−2.022 ***	−2.730 ***	−0.576 ***	−2.207 ***
	(0.000)	(0.000)	(0.000)	(0.000)	(0.000)
Control year	Yes	Yes	Yes	Yes	Yes
Control industry	Yes	Yes	Yes	Yes	Yes
Observations	12,274	12,274	15,984	15,984	15,984
AR(1)	0.010	0.005
AR(2)	0.527	0.428
Sargan test(P)	0.239	0.226
R2			0.520	0.411	0.587

Note: **, *** indicate significance at the 5%, and 1% levels, respectively.

(see Appendix A) are the results of the system GMM estimation. The results are consistent with the benchmark test after the endogeneity test.

Next, we select the annual and industry means of the business environment (Market) as the instrumental variable to replace the business environment and use two-stage least squares regression to estimate. The regression results are shown in columns (3)–(5) of Table A8 (see Appendix A). The results are consistent with the benchmark test after the endogeneity test.

4.4. Heterogeneity Analysis

4.4.1. Industry Heterogeneity Test

Manufacturing is the main body of the national economy and the foundation of a strong country. With advances in the strategic goal of “manufacturing power”, China has become a real manufacturing power. In order to better study the impact of the business environment on the sustainable development of enterprises, the regression is further based on the grouping of manufacturing listed companies and non-manufacturing listed companies to test the moderating effect of industry heterogeneity.

Table A9. Industry heterogeneity.

Variable	Manufacturing Listed Company			Non-Manufacturing Listed Company
	Esd	Rd	Esd	Esd	Rd	Esd
	(1)	(2)	(3)	(4)	(5)	(6)
Market	0.028 **	−0.008	0.023 ***	0.223 ***	0.052 ***	0.196 ***
	(0.031)	(0.446)	(0.000)	(0.000)	(0.000)	(0.000)
Rd			0.058 ***			0.950 ***
			(0.000)			(0.000)
Control variables	Yes	Yes	Yes	Yes	Yes	Yes
Intercept	−2.537 ***	−1.269 ***	−2.509 ***	−4.002 ***	−0.212	−3.569 ***
	(0.000)	(0.000)	(0.000)	(0.000)	(0.106)	(0.000)
Control year	Yes	Yes	Yes	Yes	Yes	Yes
Control industry	No	No	No	No	No	No
Observations	12,119	12,119	12,119	3865	3865	3865

Note: **, *** indicate significance at the 5%, and 1% levels, respectively.

(see Appendix A) shows the test results of the moderating effect of industry heterogeneity. It can be seen that among the listed manufacturing companies, the coefficients of Esd and Market are 0.028 and 0.023, which are significant at the levels of 5% and 1%. The coefficient of Rd and Market is not significant; that is, the impact of the business environment on enterprise innovation is not significant. Among non-manufacturing listed companies, the coefficients of Esd and Market are 0.223 and 0.196, which are significantly larger than those of manufacturing listed companies, and both are significant at the 1% level, indicating that the business environment has a more significant impact on the sustainable development of non-manufacturing enterprises. The coefficient of Rd and Market is 0.052 and is also significant at the 1% level. It can be seen that, compared with listed manufacturing companies, the optimization of the business environment is more significant for the enterprise innovation of non-manufacturing listed companies, and the mediating effect of enterprise innovation is more obvious.

4.4.2. Regional Heterogeneity

Considering that there are significant differences between the level of economic development, industrial policies, and degree of opening up in the eastern, central, and western regions of China, the business environment and the level of the sustainable development of enterprises may differ significantly. Therefore, the impact of the business environment on the sustainable development of enterprises may vary depending on the geographical area in which the enterprise is located. To further explore this difference, the regressions are grouped according to the provinces where the listed companies are located and divided into three subsamples: the eastern region, the central region, and the western region.

Table A10. Regional heterogeneity.

Variable	Eastern Region			Central Region			Western Region
	Esd	Rd	Esd	Esd	Rd	Esd	Esd	Rd	Esd
	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)
Market	0.086 ***	0.012 ***	0.073 ***	0.056 ***	0.021 **	0.041 **	0.063 ***	0.008 **	0.052 ***
	(0.000)	(0.000)	(0.000)	(0.000)	(0.015)	(0.028)	(0.000)	(0.038)	(0.000)
Rd			0.736 ***			0.600 ***			0.429 ***
			(0.000)			(0.000)			(0.000)
Control variables	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Intercept	−2.745 ***	−0.589 ***	−2.317 ***	−2.132 ***	−0.584 ***	−1.744 ***	−2.023 ***	−0.498 ***	−2.237 ***
	(0.000)	(0.000)	(0.000)	(0.000)	(0.000)	(0.000)	(0.000)	(0.000)	(0.000)
Control year	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Control industry	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Observations	11,549	11,549	11,549	2559	2559	2559	1876	1876	1876
R2	0.429	0.339	0.584	0.536	0.308	0.589	0.599	0.319	0.603

Note: **, *** indicate significance at the 10%, 5%, and 1% levels, respectively.

(see Appendix A) shows the regression results for grouping according to regional heterogeneity. It can be seen that the coefficients of the sustainable development of enterprises and the business environment in the eastern region are 0.086 and 0.073, respectively, and are significant at the 1% level. The coefficients of the sustainable development of enterprises and the business environment in the central region are 0.056 and 0.041, respectively, and are significant at the 5% level. The regression coefficients of the sustainable development of enterprises and the business environment in the western region are 0.063 and 0.052, respectively, and are significant at the 1% level. This shows that regional heterogeneity does play a moderating role between the business environment and the sustainable development of enterprises, with the contribution of the business environment to the sustainable development of enterprises being strongest among listed companies in the eastern region, followed by the western region, and it is weakest in the central region. At the same time, we find that, compared with enterprises in the central region, in the eastern and western regions, enterprise innovation plays a stronger role in promoting the sustainable development of enterprises, and the mediating effect is more obvious.

5. Conclusions and Recommendations

5.1. Conclusions

In recent years, the public and the government have paid more attention to sustainable development. As an important part of social organizations, enterprises play an important role in promoting economic development and improving people’s living standards, so it is imperative to promote the sustainable development of enterprises.

A business environment is both productivity and competitiveness. A sound business environment is fertile soil for cultivating high-quality enterprises and an important guarantee for enterprises to achieve sustainable development. Due to the impact of COVID-19, the downward pressure on the economy and business risks have increased, making it particularly important to optimize the business environment. This paper takes A-share listed companies in China from 2010 to 2020 as the research sample to empirically test the impact of the business environment on the sustainable development of enterprises.

Firstly, this paper tests the positive influence of the business environment on the sustainable development of enterprises, and the results show that there is a significant positive correlation between the business environment and the sustainable development of enterprises. In other words, the optimization of business environments is conducive to promoting the sustainable development of enterprises. The business environment is a comprehensive ecosystem of the external environment faced by enterprises when engaging in entrepreneurship, innovation, financing, investment, and other activities [13,14]. As an external macro-governance factor, the business environment can affect all economic entities within its scope. Therefore, the optimization of the business environment has a significant impact on all aspects of the whole life cycle of enterprises [36,37,38]. The transaction costs theory points out that market transaction costs are related to a certain system, and the difference between the institutional environment and legal environment will greatly affect the transaction costs of enterprises in the process of operation [39,40,41]. Therefore, the optimization of the business environment is conducive to the improvement of corporate governance mechanisms and internal control, the improvement of property rights protection policies, and the enhancement of enterprise R&D motivation so as to promote the sustainable development of enterprises.

Secondly, this paper mainly discusses the transmission mechanism of the business environment affecting the sustainable development of enterprises. The results show that enterprise innovation plays a mediating role in the relationship between the business environment and the sustainable development of enterprises. The resource-based view theory states that the competitive advantage of an enterprise comes from its superior resources [54]. The resource-based view theory explains the ability to provide sustainable competitive advantage through enterprise innovation [55]. By continuously creating resources that cannot be replicated by others through innovation, companies can build an ideal barrier to prevent competitors from entering the market, thus ensuring their competitive advantage and sustainable development. Innovation is the essence of development [49], so enterprise innovation is the fundamental path to achieving the sustainable development of enterprises [52,53]. The innovation ability of enterprises is determined by the optimal behavior of the economic participants themselves. However, under the macro background of deep government intervention and the domination of economic development, enterprise innovation may also be affected by the business environment, consisting of many factors in various fields, levels, economic agents, and economic processes. When the business environment is better, the possibility of erosion and the squeezing of the innovation achievements and innovation benefits of enterprises will be reduced, and the enthusiasm of enterprises to carry out innovation activities increases [58]. Thus, the business environment can promote the sustainable development of enterprises by facilitating business innovation.

Finally, based on heterogeneity, the study examines the influence of the business environment on the sustainable development of different types of enterprises. Based on the heterogeneity of industry, the business environment has a more significant impact on the sustainable development of non-manufacturing enterprises (non-manufacturing enterprises have a larger and more significant coefficient). Moreover, compared with manufacturing enterprises, the optimization of the business environment is more significant for the enterprise innovation of non-manufacturing enterprises, and the mediating effect of enterprise innovation is more obvious. Based on regional heterogeneity, regional heterogeneity does play a moderating role between the business environment and the sustainable development of enterprises. The role of the business environment in promoting the sustainable development of enterprises is strongest in the eastern region, followed by the western region, and it is weakest in the central region. At the same time, compared with enterprises in the central region, enterprise innovation plays a stronger role in promoting the sustainable development of enterprises in the eastern and western regions, and its mediating effect is also more obvious.

This research has a certain theoretical significance and practical value: firstly, exploring the sustainable development of enterprises, which provides a new perspective on the sustainable development of enterprises; secondly, from the perspective of enterprise innovation, this paper studies the path of the business environment affecting the sustainable development of enterprises, which enriches the relevant literature and has certain theoretical significance; thirdly, against the background of promoting sustainable development and high-quality economic development all over the world, the research is of strong practical significance for realizing the sustainable development of enterprises and high-quality economic development.

5.2. Recommendations

Based on a full-text analysis, some policy recommendations are as follows. First, the sustainable development of enterprises cannot be achieved without a sound business environment. Government departments at all levels should take optimizing the business environment as a key measure to promote economic transformation, continue to deepen reform, improve promotion mechanisms, fully protect the rights and interests of enterprises in the process of operation and development, strengthen the elements of security and responsibility, enhance the credibility and reputation of the government, and strive to create a high-quality and efficient business environment, thus creating a new situation of the sustainable development of enterprises and the economy. As a legal entity, the company should also take the initiative to find the right business environment for itself. The level of support for different types of businesses varies from region to region. Therefore, companies need to find places to incorporate and offices that best meet their development goals and plans, creating a good relationship with the local government to lay a good foundation for their business development. Second, enterprises should continue to increase R&D innovation. R&D investment is a guarantee of R&D innovation, and sufficient funds can meet the continuous R&D needs of enterprises. Internally, enterprises should increase retained earnings as R&D funds, set up a risk reserve to cope with the unexpected needs of R&D activities, and develop diversified financing channels instead of relying on their own funds or government subsidies; externally, the government should continue to implement and improve the innovation subsidy policy, establish a long-term subsidy mechanism to support enterprise innovation, continue to increase government subsidies, and give play to the guiding role of government subsidies for enterprise innovation. Third, government departments should carry out the optimization of the business environment according to local conditions, especially to increase the optimization of business environments in areas where non-manufacturing listed companies are located and in the eastern and western regions of China, so as to promote the sustainable development of enterprises and, thus, better drive the sustainable development of the industrial economy and even regional economies.

Limitations and future research: (1) To measure the business environment, this paper only uses the marketization index and does not involve the specific content of the business environment. Future research may involve other, more specific indicators of the business environment. (2) This study only involves Chinese enterprises, not foreign enterprises. The impact of the business environment on sustainable business development in other countries, as well as the comparison of this impact between countries at different levels of development, is also a topic worth studying.