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China is now the world's largest energy consumer, but severe air pollution problems have brought greater pressure to the production and development of its domestic economy. As an unavoidable result of air pollution, PM 2.5 emissions are increasing. Previous literature has focused more on the impact of PM 2.5 on the micro-level such as resident health and company location, yet macro-pattern studies between PM 2.5 and innovation are inadequate. To bridge this gap, our research uses a spatial dynamic panel data model to systematically investigate the internal and external effects of PM 2.5 concentration on innovation in China during the period 2001-2016. After forming a dataset of real-time PM 2.5 concentration from satellite detection and using an innovation index instead of patents, we find a stronger spatial linkage between PM 2.5 concentration and innovation. Thus, PM 2.5 inhibits regional innovation significantly, and this result still exists after using the air mobility index as an instrument variable to alleviate endogenous problems. Lastly, PM 2.5 concentration in neighboring regions also impedes local innovation considerably, indicating a spatial ripple effect of PM 2.5 .

Ever since China's "housing reform" in 1998, the level of real estate investment in its cities has continued to rise, leading to the occupation of green space, rapid population concentration, and a severe mismatching of financial resources. At the same time, urban air quality has changed drastically for the worse, with PM2.5 becoming the primary air indicator of concern for many cities in recent years. The existing literature has obtained sufficient results on the influence factors of air pollution, but rarely presents the relationship between real estate investment and air pollution, especially using multiple cities as the sample. This paper thus examines the impact of real estate investment on air quality using a sample of 261 prefecture-level cities in China over the period 1999-2016 through several econometric models. First, the two-way fixed-effect model shows an inverted U-shaped relationship between PM2.5 concentration and real estate investment, but most cities have not yet crossed the turning point, and that real estate investment negatively impacts air quality. Second, the indirect effect of real estate investment on PM2.5 concentration comes from its non-linear impact on urban green coverage, population density, and industrial structure, which has been verified by Hayes and Preacher's (Behav Res 45:627-660, 2010) mediation effect with non-linear forms. Third, heterogeneity analysis indicates that an inverted U-shaped relationship also exists in the subsamples, and that real estate investment in cities with more people, higher GDP, and greater development level is more likely to increase rather than mitigate air pollution. Therefore, cities should promote the green development of real estate and related industries by enhancing environmental awareness, guide the population flow toward the coordinated development between real estate investment and population distribution, and encourage environmentally friendly technological progress via a better rational allocation of financial resources.