The relationship between entrepreneurial spirit,business environment,and regional economic development based on regression models

Abstract

Business Environment refers to the sum of external factors and conditions related to government affairs, market, rule of law, cultural environment, etc. involved in the process of market entities’ entry, production and operation, exit, etc. The acceleration of the business environment on the economy has been verified, but the mediating role of entrepreneurial spirit is not yet clear. In order to study the relationship between entrepreneurship, business environment and regional economic development, a regression model was constructed based on the panel data of various provinces in China from 2020 to 2022, and the stepwise regression and ridge regression methods were used for analysis. Stepwise regression selects the explanatory variables that contribute the most to the model by gradually adding or removing variables. Ridge regression introduces regularization terms to solve the multicollinearity problem in the model and improve the stability of parameter estimation. The analysis results show that the coefficient of impact of the business environment on economic development is 0.33. At a confidence level of 1%, the regression coefficients between business environment and entrepreneurial innovation and entrepreneurship are 0.256 and 0.064. It is clear that business environment optimization can significantly promote regional economic development, in which entrepreneurship is the key intermediary. In addition, a quality business environment can reduce business costs, improve market vitality, encourage entrepreneurs to innovate and start businesses, and drive economic growth through efficient allocation of resources and knowledge sharing. Optimizing the business environment and fostering entrepreneurship are effective ways to promote regional economic prosperity.