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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| Published in | Journal of environmental economics and management Vol. 110; p. 102546 |
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| Main Authors | , , |
| Format | Journal Article |
| Language | English |
| Published |
Elsevier Inc
01.10.2021
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| Subjects | |
| Online Access | Get full text |
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| Abstract | 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. |
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| AbstractList | 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. |
| ArticleNumber | 102546 |
| Author | Xue, Shuyu Zhao, Xiaofeng Zhang, Bohui |
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| Keywords | Human capital China Firm performance Air pollution Brain drain G3 J6 Q53 |
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