As a key component of accelerating the establishment of a new development paradigm of “dual circulation”, “stabilizing foreign investment” constitutes an essential pathway for building a unified national market and advancing the Chinese path to modernization. Standardized governance serves as a critical institutional instrument that effectively removes market bottlenecks, harmonizes regulatory frameworks across different sectors, and enables high-standard institutional opening to the global economy. Given its fundamental role in shaping the business environment and facilitating rule-based economic integration, the impact of standardized governance on “stabilizing foreign investment” warrants in-depth investigation.

Drawing on the staggered and progressive implementation of the “National Standardization Comprehensive Reform Pilot” policy since 2016, this paper employs panel data collected from 276 prefecture-level and above cities in China from 2006 to 2022 to examine the underlying mechanisms, overall effects, and operational pathways. Empirical findings indicate that standardized governance significantly promotes foreign investment stabilization across the sample cities. Mechanism testing further reveals that this effect operates through three channels: optimizing regional output levels, expanding the scope of production specialization, and improving the efficiency of government administrative management. Heterogeneity analysis demonstrates that the positive impact of standardized governance is notably stronger in traditional port cities, non-old industrial cities, and peripheral cities than in their respective counterparts. In addition, standardized governance generates significant policy synergies with technological, digital, and green development, further reinforcing its overall effect. Regarding spatial dynamics, while “stabilizing foreign investment” in one region can yield positive spillover benefits for other regions nationwide, the promoting effect of standardized governance remains concentrated within the local city itself, without substantial cross-regional spillover.

The marginal contributions of this paper are threefold: First, it integrates standardized governance and “stabilizing foreign investment” into a unified analytical framework, substantially enriching the theoretical literature. Second, leveraging the quasi-natural experiment of the staggered pilot policy, it conducts rigorous empirical research using city-level panel data, precisely identifying causal effects and mechanisms. Third, it examines heterogeneity, institutional synergies, and spatial spillover patterns, offering practical pathways for optimizing the role of standardized governance in “stabilizing foreign investment” during the new stage of development.