The Effects of Haze Pollution on County-level Entrepreneurship Activity in China

This study explores the effects and mechanisms of haze pollution on entrepreneurial activities to provide evidence on the "pollution constraining development" dilemma and guide coordinated environmental and economic governance. Using firm registration data of 2,822 Chinese counties from 2003 to 2022, we examine the impact of haze on overall regional entrepreneurial activity and the proportion of environmental protection entrepreneurship. Results show that haze reduces overall entrepreneurial activity, but increases the proportion of environmental entrepreneurship. The effect on general entrepreneurship follows the environmental Kuznets curve and has a double threshold effect. Mechanism analysis indicates that haze leads to the outflow of human capital and the increase of environmental regulatory costs, which reduces the overall quantity of entrepreneurial activities, but it enhances the government's support and market demand for green technologies, promoting the development of environmental entrepreneurship. Heterogeneity analysis shows that the effects are more pronounced in the eastern and central regions of China, and in regions with higher industrial agglomeration, weaker developed green finance development or lower information transparency, and that with continuous economic growth, this effect exhibits the characteristic of "being initially pronounced, then insignificant, and subsequently pronounced again". These results highlight the significance of regional policy design, resource allocation coordination and environmental entrepreneurship promotion support for promoting the sustainable development of the economy and the improvement of the environment.