Abstract
The continuous increase in environmental challenges has significantly propelled global attention towards sustainable development. The construct of sustainable development hinges on the optimal allocation of resources, which is optimized by efficient market mechanisms. However, given the incompetency of market mechanisms in specific contexts, such as environmental externalities, designing and enforcing environmental regulations can serve as an alternative pathway to guide resources for optimal allocation. The effectiveness of environmental regulation is realized both within and across the regions. However, unlike the local impacts, the significant realm of the spatial spillover effects has only recently started to attract the attention of the researchers. The gap in knowledge regarding the spatial spillover effects is striking, given their theoretical and practical significance. Addressing the gap, this study offers a comprehensive review of existing literature on the spatial spillover effect of environmental regulation in Asia. This study presents a framework to consolidate the different approaches and outcomes of existing studies. This framework may enhance the understanding of the generation and function of the spatial spillover effects of environmental regulation. This framework is also supposed to enhance the scope and effectiveness of environmental regulatory policy measures.
