Will air pollution affect entrepreneurial activity? Evidence from China

ABSTRACT

This is the first study to examine the empirical evidence on the effect of air pollution on entrepreneurial activity, which fills the research gaps in the relevant literature and provides perspectives on both pollution avoidance behaviour and influence on entrepreneurial activity. Moreover, we explored the innovative and unconventional big data of entrepreneurial activity, which was measured at the county level from 2000 to 2019, and used thermal inversion as an instrumental variable to reduce endogenous bias. Based on the regression analysis, haze pollution inhibits entrepreneurial activity. Meanwhile, the results also show geographic differences. In underdeveloped and non-resource-based regions, the inhibiting effect is more severe. Therefore, air pollution management is an adequate assurance of increasing entrepreneurial activity.

KEYWORDS:

• Air pollution
• entrepreneurial activity
• thermal inversion
• regional development

JEL CLASSIFICATION:

• K32
• M13
• O13
• R11

Disclosure statement

No potential conflict of interest was reported by the author(s).