Air Pollution and Innovation

Felix Bracht and Dennis Verhoeven

No 685945, Working Papers of Department of Management, Strategy and Innovation, Leuven from KU Leuven, Faculty of Economics and Business (FEB), Department of Management, Strategy and Innovation, Leuven

Abstract: Existing estimates of the economic costs of air pollution do not account for its effect on inventive output. Using two weather phenomena as instruments, we estimate this effect in a sample of 1,288 European regions. A decrease in exposure to small particulate matter of 0:17 g=m3 – the average yearly reduction in Europe – leads to 1.7% more patented inventions. After ruling out reallocation of human capital, inventor mortality and R&D expenditures as drivers of the effect, we conclude that air pollution’s harm to economic output increases by at least 10% when accounting for innovation.

Keywords: Air Pollution; Air Quality; Innovation; Patent; Productivity (search for similar items in EconPapers)
Pages: 34
Date: 2021-12-20
New Economics Papers: this item is included in nep-ene, nep-env, nep-eur, nep-gro and nep-ino
Note: paper number MSI_2113
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Published in FEB Research Report MSI_2113, volume 130, issue MSI_2113, pages 1-34

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https://lirias.kuleuven.be/retrieve/643171 Published version (application/pdf)

Related works:
Working Paper: Air pollution and innovation (2025)
Working Paper: Air pollution and innovation (2021)
Working Paper: Air pollution and innovation (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:ete:msiper:685945

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