Complex Business Environment Systems and Corporate Innovation

Sustainable development has become a corporate goal all over the world, and innovation as a crucial prerequisite for sustainable development has attracted much attention. This study investigates the relationship between the business environment and corporate innovation in Chinese A-share listed enterprises from 2017 to 2020. We use a complex indicator to measure the business environment and use multiple regression models to conduct the analysis. The findings suggest that a favorable business environment promotes corporate innovation by reducing financing constraints and environmental uncertainty. Compared to non-state-owned enterprises, the positive impact of the business environment on corporate innovation is enhanced in state-owned enterprises. Concentrated ownership enhances the positive impact of a favorable business environment on corporate innovation. Our study provides a new analytical perspective on the relationship between the business environment and corporate innovation in the context of China.