Air Pollution and Entrepreneurship

Arbeitspapier

We investigate the effect of exposure to air pollution on an individual's likelihood towards entrepreneurship using panel data in China. To address omitted variable bias and endogeneity arising from self-selection into entrepreneurship and location choice, we employ an individual fixed effects model with an instrumental variable approach. Our findings show that individuals exposed to higher levels of air pollution are less likely to become entrepreneurs or diversify their entrepreneurial activities. Specifically, a one standard deviation increase in air pollution leads to a 21 percentage points decrease in the propensity for entrepreneurship and a 34 percentage points decrease in the likelihood of entrepreneurial diversification. Our study identifies potential channels through which air pollution impacts entrepreneurship. In addition, our findings reveal that air pollution has a more significant negative impact for older individuals, people residing in less populated areas, and those with lower education levels compared to their counterparts.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 16319

Classification and Topics

• Classification: Wirtschaft ; Human Capital; Skills; Occupational Choice; Labor Productivity ; Entrepreneurship ; Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
• Subject: air pollution ; entrepreneurship ; China

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Guo, Liwen ; Cheng, Zhiming ; Tani, Massimiliano ; Cook, Sarah ; Zhao, Jiaqi ; Chen, Xi
• Event: Veröffentlichung
• (who): Institute of Labor Economics (IZA)
• (where): Bonn
• (when): 2023

Further information

• Handle: http://hdl.handle.net/10419/279017
• Last update: 10.03.2025, 11:42 AM CET