How does Haze Pollution Affect Enterprise Markup?

Continuously improving the markup of firms is an important measure to enhance the superior growth of China's international commerce and promote enterprises to the middle and high end of the global value chain. The results show that haze pollution significantly inhibit the increase of firms' markup, which is still robust when considering the endogeneity problem and the policy changes. Heterogeneity analysis shows that the inhibitory effect of haze pollution on the markup is more pronounced in the samples of non-state-owned enterprises, labor-intensive and technology-intensive enterprises. Haze pollution inhibits the markup through two transmission channels: technological innovation effect and green total factor productivity (GTFP) improvement effect. Futhermore, urban environmental legislation could weaken the inhibitory effect of haze pollution on markup, and the moderating effect of environmental legislation is more significant with the increase of urban environmental legislation intensity.