Impacts of business environment on regional development: Evidence from a natural experiment

Abstract

Based on panel data for 284 cities in China from 2014 to 2020, this paper empirically examines the policy effect of the demonstration bases for mass entrepreneurship and innovation (DBEI). The results show that the construction of DBEI improves the level of innovation and entrepreneurship (IE) of the pilot cities. Moreover, this promotion effect is not the result of capturing a large number of IE resources from neighboring cities but has a coordinated nature, which can contribute to the regional IE coordinated development. In the heterogeneity analysis, the effect is greater in peripheral cities than in central and eastern regions than in the west. In addition, further analysis shows the policy promotes regional IE coordinated development mainly through two paths: rural revitalization and intellectual property protection.