The Influence of Air Pollution on R&D in Emerging Countries : Firm-Level Evidence

This paper studies the impact of air pollution on corporate R&D expense in emerging countries. The empirical results show that firms substantially reduce R&D expense in face of increasing air pollution, and those firms in emerging countries with high levels of human capital or GDP per capita will experience less reductions in R&D expense. Our analyses provide evidence that air pollution negatively affect corporate R&D expense via increasing firms’ difficulties to hire high-skilled people and raising operation and production costs