Are cities venturing green? A global analysis of the impact of green entrepreneurship on city air pollution

Situated at the intersection between environmental entrepreneurship and urban sustainability, our paper seeks to investigate the links between city-level green venture ecosystems and the ability of urban centres to reduce air pollution. Using a large dataset of 12,834 urban centres from around the world and their associated yearly average particulate matter (PM2.5), we show that an increase in the cumulative number of green start-ups drives the lowering of PM2.5 levels. Looking closely at the subsectors that drive the results, we observe that the urban centres which hosted increased numbers of innovators in smart grid technologies, energy efficiency and wind energy generation (the low carbon energy sector overall) also experienced a decrease in air pollution over the 2010-2019 period. Thus, our study is a global analysis of the environmental impact of green entrepreneurship on local air pollution. Plain English SummaryThis research seeks to understand the link between green venture-backed start-ups and air pollution within urban centres around the world. We find that there is a direct link between the number of green start-ups, venture capital (VC) funding and air quality. The air quality of an urban area improves with the number of green start-ups and with the number of VC funding. We use multiple tests and the passing of legislations to determine the causality of that relationship.We also run an analysis to determine the start-up sectors that have the highest impact on the air quality of their urban area, they were energy efficiency, materials, smart grid and wind start-ups. Surprisingly, some of the sectors from which we would have expected the highest impact, such as air quality start-ups, did not improve the quality of the air in their urban centres.