 Air pollution and employee treatmentLi Wang, Yunhao Dai and Dongmin Kong Journal of Corporate Finance, 2021, vol. 70, issue C Abstract: Although the impacts of air pollution on individual health are well documented, it is unclear whether and how air pollution affects firm strategy on employee treatment. This study examines this issue in the context of China and presents strong evidence that air pollution significantly enhances employee treatment. To establish causality, we further instrument for air pollution using thermal inversions, introduce a regression discontinuity approach relying on the Huai River boundary, and a falsification test. Monetary compensation, safety security, and career training jointly determine our findings. Two plausible mechanisms are corporate brain drain and public attention. Our results are more pronounced for non-state-owned firms, and firms with less financial constraints, intensive R&D or competition, and increased job market opportunities. Overall, we highlight that air pollution is an important noneconomic factor driving firms' human capital and employee treatment strategy. Keywords: Air pollution; Employee treatment; Brain drain; Public attention; China (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:70:y:2021:i:c:s0929119921001899 DOI: 10.1016/j.jcorpfin.2021.102067 Access Statistics for this article Journal of Corporate Finance is currently edited by A. Poulsen and J. Netter More articles in Journal of Corporate Finance from Elsevier |
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