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Air pollution and labour productivity: firm-level spatial evidence from China

Year: 2025

Type: article

Abstract: As environmental degradation increasingly threatens sustainable growth, understanding the impact of air pollution on firm performance has become a critical area of research. This study investigates the influence of delicate particulate matter (PM1) on labour productivity, utilising firm-level data from Chinese A-share listed companies and employing spatial econometric models alongside a bespoke firm-level spatial weight matrix. To address endogeneity issues, the temperature inversion variable is instrumental in ascertaining the causal effect of PM1 pollution. The findings indicate that PM1 significantly diminishes labour productivity in the affected firms, generating detrimental spatial spillover effects on neighbouring firms Additionally, further analysis of heterogeneity demonstrates that state-owned and labour-intensive enterprises exhibit reduced susceptibility to pollution shocks. In contrast, non-state-owned, technology-intensive, and capital-intensive firms experience more substantial losses in labour productivity. These insights emphasise the necessity to customise environmental policies and industrial support measures according to the distinctive characteristics of individual firms.

Source: Environmental Research Communications

DOI: 10.1088/2515-7620/adeceb

Authors: Yi Zhang, Weijun Liang, Yongfu Liang

Institution: Guangdong University of Technology

Language: English

Topic: Air Quality and Health Impacts

Subfield: Health, Toxicology and Mutagenesis

Field: Environmental Science

Domain: Physical Sciences

SDGs: Decent work and economic growth, Industry, innovation and infrastructure

Open Access status: gold

Estimated APC paid: $2,050