Environmental protection and technological innovation activities are key issues affecting urban sustainable development and value growth. using the data of 272 prefecture-level cities, this paper applying two-stage OLS to investigates how air pollution influences Chinaâ€™s technological innovation and its influential channels and, on the basis of the spatial effect of the spread of PM2.5 concentrations. The results of research indicate: the rise in air pollution significantly inhibits technological innovation level of regions as a whole. When considering the spatial effect of the spread of PM2.5 concentrations, due to the positive spillover effect of innovation activities, the spread of air pollution has negative impacts on the technological innovation activities of the surrounding cities. Human capital and labor cost are important channels through which air pollution influences Chinaâ€™s technological innovation. The implementation of carbon trading pilot policy can effectively reduce air pollution, thereby increasing technological innovation in China.
Keywords Air pollution, Prefectural level PM2.5 concentrations, Technological innovation