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The Impact of Business Registration Reform on Urban Total Factor Productivity: Empirical Evidence from China

Author(s)

Yang Yang1, Hua Lei1,*, Linqi Hou2

Affiliation(s)

1School of management, Northwest Normal University, Lanzhou, China 2College of Economics and Management, Anhui Polytechnic University, Wuhu, Anhui, China *Corresponding Author

Abstract

Optimizing the business environment exerts a positive influence on urban total factor productivity (TFP). Simplifying administrative approval processes and reducing the costs of business establishment and dissolution are crucial means of optimizing the business environment. This paper treats business registration reform as a quasi-natural experiment, collecting and organizing business registration reform data from 279 prefecture-level cities in China from 2010 to 2021. Using a difference-in-differences (DID) model, the study evaluates the policy effects of business registration reform on urban productivity. The results show that business registration reform significantly enhances urban productivity. This conclusion remains robust after a series of robustness checks, including parallel trend tests, PSM-DID, and placebo tests. Structural optimization effects, innovation-driven effects, and market competition effects are the primary channels through which business registration reform enhances urban TFP. The effectiveness of business registration reform in improving urban productivity requires the dual support of government efficiency and internet infrastructure. The higher the government efficiency and the more complete the internet infrastructure, the greater the impact of business registration reform on urban productivity. The findings provide empirical evidence and theoretical references for accelerating business registration reform and promoting urban economic development efficiency.

Keywords

Business Registration Reform; Urban Productivity; Institutional Environment; Urban Resource Endowment; Internet Infrastructure

References

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