Relationship between business environment and regional innovation level: Examining the moderating role of digital finance

This study analyzes data from 255 prefecture-level cities in China from 2012 to 2022 to investigate the relationship between the business environment and regional innovation levels and the moderating effect of digital finance in this relationship. Findings indicate that digital finance and a good business environment individually increase the regional innovation level. Moreover, foreign direct investment mediates the relationship between the business environment and regional innovation level, and digital finance plays a positive moderating role in this relationship. •Digital finance helps to enhance the regional innovation level.•A good business environment contributes to the improvement of the regional innovation level.•FDI plays a mediating role between the business environment and the regional innovation level.