•Entrepreneurship promotes the marketization of the business environment.•R&D investment has a threshold effect on the marketization of the business environment.•The level of regional innovation affects the marketization of the business environment.•The marketization level of the business environment affects regional powers.•Decentralization is conducive to the cultivation of entrepreneurship. Entrepreneurship has become an essential for countries to promote the marketization of the business environment and accelerate economic growth in the post-epidemic era. Based on the investigation of 31 provincial-level panel data in China, this paper concludes that entrepreneurship plays a significant role in promoting the marketization of the business environment. Further research found that the level of government research and development (R&D) funding and regional innovation capabilities are intermediary variables that affect the marketization of the business environment and have a threshold effect. When the government R&D funding crosses the second threshold, every 1% increase in regional innovation capabilities decreases the degree of marketization by 0.197%. Therefore, it is crucial to rapidly streamline the administration process and delegation of power, optimize the government’s administrative efficiency, and give full play to the entrepreneurial spirit to promote the economy’s sustainable development.