Analysis of the Border Effect of Pollutants: An Empirical Study Based on Panel Data from Chinese Counties

Boya Sun and Haipeng Duan

Emerging Markets Finance and Trade, 2025, vol. 61, issue 14, 4305-4325

Abstract: Pollution emissions, as a form of collective resource, also exemplify the “tragedy of the commons” phenomenon. This article examines the boundary effect of pollutants in provincial border area. By constructing a quasi-natural experiment based on county-level administrative regions located on both sides of China’s administrative boundaries, the empirical results demonstrate that enterprises within these boundary-adjacent counties exhibit significantly higher pollutant emissions compared to those in non-boundary areas with a substantial increase of 8.2% in wastewater and 11.1% in SO2 emission. One of the potential mechanisms of boundary pollution can be attributed to the fact that border firms, by less pollution treatment equipment and its inadequate processing capacity. Moreover, the lack of public attention and insufficient regional development of border area could also lead to the boundary effect of pollution. In further analysis of the diffusion characteristics of various pollutants, the result confirms that, in comparison to the control of waste liquid discharges, the management and control of waste gas emissions in border counties are less effective. In addition, the difference in exhaust emissions between border and non-border counties is greater. The boundary effect of pollution is reflected in regions of old industrial base and low degrees of industrialization.

Date: 2025
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DOI: 10.1080/1540496X.2025.2516137

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