We estimate air pollution’s causal effect on firm innovation based on a nationwide sample of Chinese manufacturing firms. Using thermal inversion as instrument, we show that air pollution significantly reduces innovation: the total loss in new product value for our sample firms amounts to...

Through which channels, physical or cognitive, can air pollution influence worker performance? This question has not been answered in the literature. Using a unique dataset on the performance of soccer players in China, we investigate the effect of air pollution on different performance...