Business Environment,Entry Barrier and Enterprise Pricing Ability
Numerous studies have focused on the impact of the business environment on macroeconomic and corporate performance,but few studies have explored the impact of the business environment on corporate pricing power.This paper identifies the impact of the business environment on the markup rate and pricing ability of enterprises.Firstly,this paper constructs a framework for analyzing the markup rate of heterogeneous enterprises,theoretically expanding the mechanism of the impact of the business environment on the enterprise pricing ability,and considering the analysis under market entry barriers of different institutional costs,industry fixed costs,and product substitution elasticity.Secondly,this paper uses industrial enterprise data from 1998 to 2013 to test the impact of the business environment on the enterprise pricing ability.Thirdly,this paper verifies the mechanisms of the institutional cost reduction effect and market competition effect,as well as the moderation effect of market entry barriers.Finally,it examines the heterogeneous impacts on different types of enterprises.The paper finds that the business environment suppresses the enterprise pricing ability,for the improvement of the business environment reduces institutional cost and market critical cost,promotes the entry of a large number of enterprises,intensifies market competition,and leads to a decrease in the markup rate and enterprise pricing ability.The mechanism analysis shows that the institutional cost reduction effect and market competition effect are important transmission channels.The inhibitory effect of business environment on enterprise pricing ability is influenced by entry barriers.If the entry barriers faced by enterprises are weak,the improved business environment can significantly reduce the enterprise pricing ability and promote resource allocation efficiency.In addition,for enterprises with high innovation level and large scale,the improvement of the business environment has a relatively small inhibitory effect on enterprise pricing ability,mainly due to the relatively small market competition pressure faced by such enterprises.For enterprises with tight financing constraints and low technological level,private enterprises,export enterprises,enterprises in the eastern region,non-surviving enterprises,and domestic enterprises,the inhibitory effect of the business environment on their pricing ability will be more significant.The paper has the following policy implications:(1)The government should further improve the business environment and carry out institutional reform to provide meticulous and thoughtful services for enterprises.(2)The government should continuously promote the rational flow of resource elements,reduce various market entry barriers,and create more a fair market environment for enterprises.(3)In addition to improving the business environment,we should promote reform and innovation in multiple fields,gradually reduce the cost of administrative mechanism,improve regional marketization,and continuously create a favorable atmosphere of respecting business.(4)The government should formulate more policies to promote enterprise innovation,such as helping medium and small-sized enterprises and private enterprises achieve healthy development in the market-oriented system reform,and continuously improving their innovation and technology application capability,which is an important task in promoting high-quality development of the real economy.There are several possible innovations in this paper:(1)There is little literature examining the impact of the business environment on enterprises from the perspective of pricing ability,while this paper explores the impact of the business environment on the enterprise pricing ability and its mechanism theoretically and empirically,filling the research gap in this field.(2)By constructing a heterogeneous enterprise markup rate model analysis framework,this paper incorporates institutional cost and different market entry barriers into the theoretical mechanism,and comprehensively explores the impact of the business environment on the enterprise pricing ability from a general equilibrium perspective.(3)This paper rigorously verifies the institutional cost reduction effect and the market competition effect,while examining the moderating effect of market entry barriers and multiple heterogeneity tests,which enhances understanding of the economic effect of the business environment in existing literature.(4)This paper provides a comprehensive and scientific evaluation of business environment indicators from the perspectives of the government environment,economic environment,social environment,legal environment,and international environment,enriching the measurement methods of the business environment.Therefore,it is a significant supplement to existing literature.
Business EnvironmentEntry BarrierPricing AbilityMarket Competition
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