Research On The Microeconomic Impact Of Air Pollution

The long-term extensive growth model has led to more and more serious environmental problems in China,which has become the fourth major social concern after medical care,education and housing.Serious environmental pollution not only brings huge control cost,but also has negative influence on individual health,residents'happiness and non-moral behavior.The influence of environmental pollution on macro-economic development,people's health and individual behavioral decisions has been extensively explored in academic world,but few researches on the micro-enterprise level.Enterprises are the carrier of social and economic growth,but also the?big container?for absorbing labor force.Studying the effect of air pollution on enterprises can provide reasonable policy suggestions for enterprises,which helps us to have a more comprehensive understanding of the significance of?lucid waters and lush mountains?to the development of enterprises,providing micro-enterprise-level answers for the realization of environmental and economic dividends.In addition,analyzing the costs of enterprises caused by environmental pollution will help local governments provide a theoretical basis for the further optimization of environmental protection policies,which has important practical significance for achieving a win-win situation between?environmental protection?and?economic growth?.According to the theory of cost-benefit,labor migration theory and human capital theory,this dissertation conducts theoretical and empirical analyses on air pollution and enterprise behavior changes.Specifically,based on Chinese enterprise survey databases and micro-individual databases,combined with a variety of empirical methods to deal with the endogenicity,this dissertation focuses on the impact of air pollution on executive compensation,enterprise productivity and donation behavior of enterprise,and examines the potential impact mechanisms behind different behavioral decisions.The results show that:First,serious air pollution will increase the monetary compensation that enterprises pay for executives,thereby raising their labor costs.This dissertation matches enterprise data with air pollution data extracted from satellites,and examines the impact of air pollution on executives'monetary compensation and compensation structure.The results reveal that that air pollution has a significant positive influence on executive monetary compensation,that is,for every 1%increase in PM_2.5 emissions,executive's monetary compensation will rise 0.198%.Alternative air pollutants(AQI,SPD and SO₂)have significantly increased the monetary compensation of executives of listed companies.Considering the different structure of executive compensation,this dissertation also explores the impact of air pollution on the value of executive stock holdings,finding that a significant negative correlation between the two.The heterogeneity results show that air pollution has a greater impact on the executive compensation of state-owned enterprises,enterprises with fierce market competition,and high-polluting enterprises.Further,this dissertation finds that in the face of severe air pollution,enterprise executives tend to pass on the cost of avoiding air pollution damage to monetary compensation.Furthermore,air pollution tends to increase the potential turnover rate of executives,thereby increasing the cost of recruitment and training new labor force,which is not conducive to the long-term and effective development of enterprises.Through this push-back mechanism,enterprises have greater incentives to increase executive compensation to ease the problem of brain drain.Second,serious air pollution will reduce the enterprise productivity and affect the production and operation activities of enterprises.Based on the Chinese industrial enterprise database from 1998 to 2013,this dissertation uses the spatial discontinuity of air pollution created by the winter heating policy in the North of Qinling Mountains-Huai River(QH)line to effectively isolate the reverse causality between air pollution and enterprise productivity,and adopts the regression discontinuity method to investigate the impact of air pollution on enterprise productivity.The results show that air pollution will significantly reduce the enterprise productivity.For every 1%increase in PM_2.5,enterprise productivity will drop by 0.692%.Other air pollutants(AQI,NO₂,PM₁₀ and SO₂)have similar negative effects on enterprise productivity.Moreover,the negative impact of air pollution on enterprise productivity is more pronounced in non-state-owned enterprises,capital-intensive enterprises,enterprises with greater market competition,and enterprises located in high-polluting industries.Using micro-individual databases and enterprise databases,this dissertation further examines the potential impact mechanisms of air pollution on the enterprise productivity,finding that air pollution may exert a negative impact on enterprise productivity by increasing human health risks,crowding out R&D funds,causing the misallocation of resources and reducing the labor supply.The results reveal the urgency of current environmental governance from the perspective of enterprise development,and provide new ideas for enterprises to improve their competitiveness.Finally,severe air pollution will increase enterprise charitable donation and may cause misallocation of resources within enterprises.Taking the temperature inversions as the instrumental variable of air pollution to overcome the endogenous issiue,this dissertation estimates the influence of air pollution on enterprise donation using the 2SLS method,and identifies the donation motives of different enterprises.The results display that air pollution has a significant positive effect on the absolute donation level,relative donation level and donation willingness of enterprises.Faced with the negative impact of air pollution,high-polluting enterprises are more likely to donate for advertising purposes,while low-polluting enterprises donate for altruistic reasons.This dissertation expands the research on the influencing factors of enterprise donation behaviors,and provides a new perspective for the government to look at environmental costs objectively.