The costs of air pollution: How does air pollution affect technological innovation?

Severe air pollution not only has serious economic and environmental consequences, but also poses a challenge to technological innovation (TI). Existing literature has limited discussion of the potentially damaging effects of air pollution. This article explores the influence and scenario mechanism of air pollution on TI from a novel perspective and analyzes its heterogeneity using provincial data for China from 2008 to 2019. The results indicate a significant inhibition of air pollution on TI, with a 1% increase in SO2, PM2.5, and NOx emissions leading to a 0.316%, 0.529%, and 0.751% decrease in patent applications, respectively. In comparison, invention patents are less constrained by air pollution than utility patents. The threshold effect results suggest that the influence of air pollution on TI is different under various environmental regulation scenarios. The negative effect gradually increases with the strict environmental regulation, and the threshold value is 2.372. The effect and scenario mechanism of air pollution on TI exhibit distinct regional differences. The capital and labor crowding out effects of air pollution are more prominent in eastern China, resulting in an enormous negative impact on TI. This provides references to identify the potential innovation risks of air pollution and contributes to formulating and implementing targeted innovation-driven strategies.