Does air quality affect inventor productivity? Evidence from the NOx budget program

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review

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Original languageEnglish
Article number102170
Journal / PublicationJournal of Corporate Finance
Online published8 Mar 2022
Publication statusPublished - Apr 2022


Using the NOx budget program (NBP) as a quasi-natural experiment, we study how air quality affects the productivity of patent inventors. Motivated by previous studies linking air quality to people's risk-taking tendencies and cognitive abilities, we find that after the implementation of the NBP, inventors located in NBP participating states produce more patents and the quality of their patents increases. These inventors engage more in exploratory innovation and less in exploitative innovation, and they shift their strategies toward risky, high-value innovation. Our findings suggest that risk-taking and cognitive ability are the channels through which improved air quality enhances inventor productivity.

Research Area(s)

  • Air quality, Innovation quality, Innovation strategy, Inventor productivity