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

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Listed:
  • Li, Shaoshuai
  • Li, Zhigang
  • Ni, Jinlan
  • Yuan, Jia

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.

Suggested Citation

  • Li, Shaoshuai & Li, Zhigang & Ni, Jinlan & Yuan, Jia, 2023. "Growing pains for others: Using holidays to identify the pollution spillover between China and South Korea," China Economic Review, Elsevier, vol. 77(C).
    • Handle: RePEc:eee:chieco:v:77:y:2023:i:c:s1043951x23000019
    DOI: 10.1016/j.chieco.2023.101916
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    References listed on IDEAS

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    More about this item

    Keywords

    Pollution; Environmental externalities; Air visibility; Transboundary pollution spillover;
    All these keywords.

    JEL classification:

    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • H8 - Public Economics - - Miscellaneous Issues
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation

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