The Role of Economic Complexity in the Ecological Footprint: A Review of the EKC Hypothesis for Iran (in Persian)

Ali Moridian (), Nasser Yarmohammadian (), Masoumeh Motalebi () and Afsaneh Shadmehr ()
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Ali Moridian: Isfahan University of Arts, Isfahan, Iran
Nasser Yarmohammadian: Department of Urban Economics, Isfahan University of Arts, Isfahan, Iran
Masoumeh Motalebi: Lorestan University, Khorramabad, Iran.
Afsaneh Shadmehr: Science and Research Branch, Islamic Azad University, Tehran, Iran.

The Journal of Planning and Budgeting (٠صلنامه برنامه ریزی و بودجه), 2021, vol. 26, issue 2, 153-179

Abstract: The aim of this study is to test the validity of the Kuznets Environmental Curve (EKC) hypothesis for Iran. For this purpose, this study used the FourierARDL method and causality test with time change to analyze the short-term and long-term relationships between economic growth, economic complexity index, energy consumption, and ecological footprint. Findings from the Fourier ARDL approach confirm the existence of coherence between variables. In addition, the results of this study show that energy consumption and economic growth increase the ecological footprint in the short and long term. However, the short-term elasticity of economic growth is smaller than the long-term elasticity, meaning that the EKC hypothesis is not valid for Iran. This finding is confirmed by the causality test with time change. The overall results show that economic complexity has a diminishing effect on the ecological footprint and economic growth is not effective in solving environmental problems in Iran. Therefore, the Iranian government should encourage an environmentally friendly production process and cleaner technologies in exports to reduce environmental pollution.

Keywords: Economic Complexity; Fourier ARDL; Casualty Test with Time Change; Ecological Footprint; Environment. (search for similar items in EconPapers)
JEL-codes: C32 O33 Q53 (search for similar items in EconPapers)
Date: 2021
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