The Assessment of Green Business Environments Using the Environmental–Economic Index: The Case of China

Abstract

The quality of a country’s business environment speaks volumes about its government’s capacity and competitiveness. Unfortunately, the current system only evaluates countries and cities, overlooking the business environments of individual provinces. To address this issue, this study utilizes a green and sustainable development approach to evaluate the business environments of 30 provinces/municipalities in China. By incorporating ecological and environmental protection and sustainable development indicators, a novel green business environment index is constructed and analyzed to determine its impact on macroeconomic sustainable development and micro-enterprise operation. Taking into account the business environment index established by the World Bank and other organizations, this evaluation system adds ecological and environmental indicators specific to each province/municipality in China from the year 2011 to 2020. The result is a provincial green business environment evaluation index system consisting of 5 primary indicators and 30 secondary indicators. Principal component analysis (PCA) is then applied to rank the green business environment for each province/municipality. Furthermore, the overall green business environment of the Eastern region is superior to that of the Central and Western regions, highlighting the uneven development of the business environment in China.