Does the perception of smart governance enhance commercial investments? Evidence from Beijing, Shanghai, Guangzhou, and Hangzhou

This study explores how the perception of specific aspects of smart governance affects the business environment as to attract investment. To this end, we used a survey design and collected data from Beijing, Shanghai, Guangzhou, and Hangzhou. A total of 500 responses from different industries and companies were obtained and then empirically analyzed using ridge regression and intermediary effect models. We found that the perception of smart governance enhances investment due to strong governance and abundant business opportunities. Natural sustainability attracts investment directly because, when cities become smart, they tend to improve their sustainability and attract talent and capital inflows. This external participation has a direct impact on enterprise investment because it creates more business opportunities. An improved social credit system represents the comprehensive progress of the business environment and positively mediates smart governance and investment. This is the first study to combine the key elements of smart governance, the development stage of smart governance, and various dimensions of the business environment to analyze the influence of smart governance perceptions on commercial investments.