Brain drain: The impact of air pollution on firm performance

Air pollution is a growing hazard to human health. This study examines whether air pollution affects the formation of corporate human capital and thereby firm performance. We find that people exhibit an intention to look for jobs in less polluted areas when air pollution is high in their location. T...

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Bibliographic Details
Published inJournal of environmental economics and management Vol. 110; p. 102546
Main Authors Xue, Shuyu, Zhang, Bohui, Zhao, Xiaofeng
Format Journal Article
LanguageEnglish
Published Elsevier Inc 01.10.2021
Subjects
Air pollution
Brain drain
China
Firm performance
Human capital
Human capital
China
Firm performance
Air pollution
Brain drain
G3
J6
Q53
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Summary:Air pollution is a growing hazard to human health. This study examines whether air pollution affects the formation of corporate human capital and thereby firm performance. We find that people exhibit an intention to look for jobs in less polluted areas when air pollution is high in their location. This suggests that individuals arrange their lives at least partially in response to air pollution. Consistent with this hypothesis, we find that the level of skilled executives and employees at a firm drops significantly when information on pollution in the firm's location is accessible in real time and when the pollution level in the firm's location increases, especially in locations where air pollution poses greater health concerns. In addition, parallel reductions in firm productivity and value are found and become more salient when firms have a greater dependence on human capital.
ISSN:0095-0696
1096-0449
DOI:10.1016/j.jeem.2021.102546