Economic development, social–political factors and ecological footprint: a global panel data analysis

Isma Samreen () and Muhammad Tariq Majeed ()
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Isma Samreen: Quaid-I-Azam University
Muhammad Tariq Majeed: Quaid-I-Azam University

SN Business & Economics, 2022, vol. 2, issue 9, 1-19

Abstract: Abstract The concept of the EKC has great importance, because it makes it feasible to predict the future level of environmental degradation with the help of forecasted GDP. This study reinvestigates the Environmental Kuznets Curve (EKC) hypothesis by measuring environment degradation using ecological footprint as a measure of the environmental quality. The sample is based on 128 countries over the time period 1971–2017. This study incorporates socio-political factors as the determinants of environmental quality. The empirical analysis has been done by employing different traditional and latest econometrics techniques for instance, Pooled Ordinary Least Square (POLS), Fixed Effects Method (FEM), Random Effects Method (REM), Driscoll Kraay (DK) standard errors, Fully Modified Ordinary Least Square (FMOLS) and cross section weighted panel EGLS. Moreover, the diagnostic tests are also performed for the detection of multicollinearity, heteroscedasticity and so on. The finding indicates that there is an inverted U shaped relationship between economic growth and ecological footprint. This study accepts the validity of the Environmental Kuznets Curve (EKC) hypothesis. Moreover, energy consumption, urbanization and life expectancy at birth increase the ecological footprint. In addition, improvement in political institutions also improves the quality of the environment.

Keywords: EKC hypothesis; Economic development; Ecological footprint (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s43546-022-00320-4

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