Business environment and its impact on high-quality economic development: A configurational analysis of enhancement pathways

Abstract

The nexus between the business environment and high-quality economic development is pivotal for fostering sustainable growth. This study delves into their interrelationship, recognizing its profound practical significance. We have developed a comprehensive index system to evaluate high-quality economic development, encompassing four key dimensions: green development quality, robust economic growth, innovation dynamics, and equitable societal benefits. Concurrently, a business environment index system has been constructed, capturing the nuances of government functionality, social context, and market dynamics. Employing system theory and a configurational approach, this research utilizes the fsQCA method to decode the intricate mechanisms, dynamic pathways, and synergistic interactions among diverse elements within the business environment that influence high-quality economic development. The empirical findings underscore the substantial impact of the business environment on high-quality economic development, highlighting two primary catalyst pathways: the "Rule of Law-Government Efficiency" trajectory and the "Market-Led-Credit Environment" route. These pathways reveal that government efficiency, credit accessibility, legal frameworks, market fairness, and openness are instrumental in driving high-quality economic development. Conversely, inefficiencies in the market mechanism and governmental roles often result in suboptimal development trajectories. The study advocates for policy formulations that recognize and leverage regional distinctiveness, optimizing local resources and strengths to spur high-quality economic development tailored to each region’s unique context.