Growing pains for others: Using holidays to identify the pollution spillover between China and South Korea

Shaoshuai Li, Zhigang Li, Jinlan Ni and Jia Yuan

China Economic Review, 2023, vol. 77, issue C

Abstract: Transboundary pollution spillovers have emerged as an important global issue in designing optimal regional economic policies. In particular, China and South Korea have been at odds over which country is the “source of evil” and responsible for their air pollution. This study investigates this issue and identifies the burden of the environmental externalities of pollution between China and South Korea. There are two novelties of this study: first, we employ a unique daily pollution indicator, that is, air visibility, to address data limitations. Second, we propose a novel identification strategy to examine the pollution spillovers of economic activities by exploiting the different holiday arrangements between China and South Korea. Evidence indicates significant bilateral environmental externalities between China and South Korea. Therefore, China and South Korea should make joint efforts to deal with their environmental challenges.

Keywords: Pollution; Environmental externalities; Air visibility; Transboundary pollution spillover (search for similar items in EconPapers)
JEL-codes: H8 Q2 Q5 R1 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:77:y:2023:i:c:s1043951x23000019

DOI: 10.1016/j.chieco.2023.101916

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