Does haze pollution damage urban innovation? Empirical evidence from China

The continuous outbreak of haze pollution attracted full attention and became one of the most severe environmental problems in China. Based on the panel data of 266 prefecture-level cities from 2000 to 2016, this paper investigates the effects of haze pollution on China's urban innovation. Results show that (1) haze pollution does not damage urban innovation but forms a crisis-driven effect to stimulate it. (2) Haze pollution enhances the public's environmental awareness, which induces the government to invest more in science and technology, and finally forces the improvement of urban innovation. (3) Haze pollution causes the loss of human capital and leading to a decrease in the number of people who engaged in scientific research, which weakens the city's technological innovation ability. (4) The crisis-driven effect caused by haze pollution boosts the improvement of technological innovation in eastern cities, large cities, and northern cities. This study enriches the evidence on the relationship between haze pollution and urban innovation, which is significant for local governments to formulate green development and innovation-driven strategies.