Linking Air Pollution to Environmental Innovation: An Attention‐Based Perspective on Entrepreneurs' Attention Allocation

ABSTRACT

Air pollution is a prominent indicator of environmental degradation worldwide. While much prior work has highlighted its negative effects, emerging studies suggest it may also exert a counter‐pressure effect on firms' environmental behaviors. However, the potential non‐linear dynamics of this relationship remain underexplored. Drawing on the attention‐based view (ABV) and using a panel dataset of listed manufacturing firms in China from 2014 to 2023, this study investigates how air pollution affects corporate environmental innovation and the mediating role of entrepreneurs' attention allocation. It further explores how overseas entrepreneurs' experiences moderate this relationship. The results reveal an inverted U‐shaped effect of air pollution on firms' environmental innovation. Entrepreneurs' attention allocation partially mediates this effect, while overseas experience reshapes the inverted U‐shaped relationship between air pollution and attention allocation, shifting the inflection point upward and leftward. These results extend the ABV and provide new insights into the “pollution–innovation” paradox.