Working Paper: NBER ID: w24389
Authors: Ross Levine; Chen Lin; Zigan Wang
Abstract: We study the impact of pollution on the migration of high human capital employees. We link data on the opening of toxic-emitting plants with the career paths of executives at S&P 1500 firms. We discover that toxic-emitting plant openings increase executive departures from neighboring firms with adverse effects on stock prices. The results: are larger when polluting plants and firms are geographically closer, hold only for executives physically-based at treated firms, hold only for the opening of polluting plants, do not reflect other local factors or prior stock price performance, and are larger among executives with more general human capital.
Keywords: pollution; human capital; migration; executives; corporate finance
JEL Codes: G3; J61; J63; Q5; R32
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| opening of toxic-emitting plants (L99) | increase in executive migration (F22) |
| increase in executive migration (F22) | drop in cumulative abnormal returns (CARs) (G14) |
| physical exposure to pollution (Q53) | increase in executive migration (F22) |
| general human capital skills (J24) | increase in executive migration (F22) |
| non-executive directors (G34) | no increase in executive migration (F22) |