Study on the impact of business environment on private enterprises' technological innovation from the perspective of transaction cost

Technological innovation of private enterprises is an important condition for promoting high-quality development of China's economy. This paper matches the regional business environment data with the data of A-share private listed companies from 2017 to 2020 to study the impact of business environment on private enterprises' technological innovation and its mechanism of action based on the perspective of transaction cost. The empirical results show that the optimization of regional business environment promotes the technological innovation of private enterprises. A quality business environment reduces private enterprises' rent-seeking expenses and agency costs, thus promoting their technological innovation. Heterogeneity analysis shows that at a higher degree of market competition, the business environment is more conducive to stimulate the enthusiasm and motivation of private enterprises' technological innovation. A quality business environment reduces the impact of enterprise size differences on private firms' technological innovation, and the uneven development of business environment among regions.