How does a good environment affect firms' productivity? evidence from urban public green spaces in China

The environment is one of the most fundamental factors that affects human economic activities. This article investigates whether good environment affects firms' productivity. Using the urban public green spaces as the proxy of good environment, we find that firms located in cities with more public green spaces have relatively higher productivity, and the result remains robustness after considering the endogeneity problem. We also find that the productivity of those firms with more high-skilled employees are more likely to be affected by urban public green spaces, and they also have more innovation output which is believed as one of the important factors that affect firms' productivity.

Automated summary

The environment is a crucial factor affecting human economic activities. This study examines the impact of a good environment on firms' productivity. By using urban public green spaces as a measure of a good environment, the research shows that firms located in cities with more public green spaces have higher productivity, even after addressing the issue of potential endogeneity. Furthermore, firms with a higher proportion of high-skilled employees are more likely to be influenced by urban public green spaces and also demonstrate greater innovation output, which is considered an important determinant of firms' productivity.