Does business environment optimization improve carbon emission efficiency? Evidence from provincial panel data in China.

Abstract

Previous research has yielded mixed conclusions regarding whether business environment (BE) optimization can enhance carbon emission efficiency (CEE). This study delves into the impact of the BE on CEE using panel data from 30 provinces in China, employing fixed effect, quantile, and mediated effect models. It innovates in three key areas: research perspective, mechanism of action, and heterogeneity analysis. The research found that the BE optimization enhances CEE. Meanwhile, the influence of the BE on CEE exhibits marginal decreasing characteristics. The mechanism analysis reveals that the BE enhances CEE through the industrial structure optimization effect and the progress of green technology, while it diminishes efficiency through the energy rebound effect. Heterogeneity analysis indicates that BE optimization has a stronger impact on improving CEE in provinces with robust government governance, younger governors, and highly educated officials. The policy implication suggests that local governments should continually optimize the BE, enhance government governance capacity, and prioritize the appointment of young and highly educated officials.