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The effect of environmental regulation on business ecosystem

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  • Xuan, Siyuan
  • Fu, Chen

Abstract

This study adopts a functional-coefficient regression model to examine Chinese urban panel data spanning 2017–2022 to explore how environmental regulation influences the business environment under different green total factor productivity (GTFP) levels. The findings reveal that when GTFP is at a low level, environmental regulation can effectively improve the business environment. However, as GTFP continues to increase, its negative influence gradually begins to emerge and may even reverse in some cases. Drawing on these research results, we propose targeted regulatory strategies to optimize the business environment, underscoring the significance of taking GTFP levels into account during policymaking.

Suggested Citation

  • Xuan, Siyuan & Fu, Chen, 2026. "The effect of environmental regulation on business ecosystem," Finance Research Letters, Elsevier, vol. 89(C).
    • Handle: RePEc:eee:finlet:v:89:y:2026:i:c:s1544612325024523
    DOI: 10.1016/j.frl.2025.109203
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