With　the　intensification　of　global　competition　and　development　of　investment　theories,　foreign　direct　investment　(FDI)　is　no　longer　solely　affected　by　economic　factors.　Many　noneconomic　factors,　such　as　policies　and　institution,　now　play　an　important　role　in　FDI　inflow.　As　a　composite　indicator,　business　environment　has　attracted　a　growing　attention　from　investors.　From　theoretical　and　empirical　perspectives,　this　paper　quantifies　and　qualifies　the　influence　of　business　environment　over　the　FDI　under　different　conditions.　The　impact　mechanism　of　business　environment　on　the　FDI　was　refined　by　decomposing　business　environment　into　multiple　subfactors,　and　considering　various　factors　of　different　economies,　such　as　natural　resources　(NR),　technological　resources　(TR),　and　political　stability　(PS).　An　empirical　analysis　was　conducted　on　the　panel　data　of　26　countries　in　2005-2018.　The　results　show　that:　the　host　country　can　attract　more　FDI　inflow　by　improving　business　environment,　NR,　TR,　and　PS;　excessively　high　NR　and　TR,　to　a　certain　extent,　suppress　the　promotion　effect　of　business　environment　on　FDI;　four　subfactors　of　business　environment,　namely,　the　protection　of　small　and　medium　investor　(PI),　cross-border　trade　(CT),　electricity　supply　(ES),　and　insolvency　(IN),　have　relatively　high　promotion　effects　on　FDI　inflow.　The　research　results　enrich　the　theories　on　FDI　and　business　environment,　and　provide　a　reference　for　the　design　of　innovative　polices.　©　2020　WITPress.　All　rights　reserved.