Measurement, Spatial Differences, and the Dynamic Evolution of China's Urban Business Environment Levels

Abstract

The business environment is a critical element in promoting high-quality urban economic development. To evaluate the quality of the business environment in Chinese cities, we first build a business environment evaluation system in this paper. Then using the entropy weight, Dagum Gini coefficient, β-convergence model, and Markov chain method, we evaluate and analyze the development level, spatial differences, and dynamic development patterns of the business environments in 278 cities in China from 2003 to 2019. Our findings reveal that the overall business environment level in Chinese cities is not high. There are significant differences in business environment levels between megacities, large cities, and small–medium-sized cities, and within-group differences and between-group differences are the main reasons for the differences in business environment levels. However, the contribution rate of within-group differences shows a downward trend, while the contribution rate of between-group differences shows an upward trend. In addition, the business environment levels in Chinese cities have spatial correlation, and the national and three major city groups' business environment levels exhibit strong absolute and conditional β-convergence processes. Finally, the business environment levels in Chinese cities demonstrate path dependence, which is typified by low mobility and makes achieving upward mobility challenging.