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Business environment and industrial chain: Evidence from a quasi-natural experiment in China

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  • Dun, Shiyu

Abstract

Against the backdrop of global industrial chain restructuring and domestic regional coordinated development, this paper takes provincial "Regulations on Optimizing the Business Environment" as a policy shock, constructs a quasi-natural experiment framework based on inter-provincial regulatory differences, and uses 2005–2022 panel data of 28 Chinese provinces to investigate the impact of business environment optimization on industrial chain transfer, revealing heterogeneity across industry type, regional gradient, and industrial hierarchy. The research finds a dual-track effect: promoting manufacturing transfer-out and tertiary industry transfer-in, with high-end service industries agglomerating in eastern regions. Regionally, the eastern region shows retention and upgrading effects, while central-western regions show undertaking and cultivation effects, with stable east-west transfers. Industrially, low-end industries face a strong push-out effect, and high-end industries are strongly retained. Transaction cost savings are identified as the core mechanism, providing references for regional policy formulation.

Suggested Citation

  • Dun, Shiyu, 2026. "Business environment and industrial chain: Evidence from a quasi-natural experiment in China," Finance Research Letters, Elsevier, vol. 92(C).
    • Handle: RePEc:eee:finlet:v:92:y:2026:i:c:s1544612326000966
    DOI: 10.1016/j.frl.2026.109565
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    References listed on IDEAS

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