Journal
ENVIRONMENTAL SCIENCE AND POLLUTION RESEARCH
Volume 29, Issue 17, Pages 24925-24940Publisher
SPRINGER HEIDELBERG
DOI: 10.1007/s11356-021-17673-2
Keywords
Economic complexity; Democratic accountability; Ecological footprint; Renewable energy technology budgets; Income
Categories
Funding
- ILMA University
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The study reveals that economic complexity contributes to reducing ecological footprints, while greater democratic accountability may increase them. On the other hand, renewable energy technology budgets and financial development are shown to mitigate ecological footprints.
The economic structure of countries can influence economic growth, energy demand, and environmental footprints. However, the literature on economic complexity and ecological footprint (EFP) nexus is scarce. Besides, democracy is an important factor that may affect environmental policies and environmental sustainability. Hence, this paper investigates the effect of democracy, economic complexity, and renewable energy technology budgets on the EFP in G7 countries controlling income and financial development from 1985 to 2017. The findings from Westerlund (J Appl Econ 23:193-233, 2008) and other cointegration methods depict cointegration among variables. The long-run estimates from the continuously updated fully modified method unfold that economic complexity contributes to reducing the EFP. However, greater democratic accountability boosts the EFP figures rather than reducing them. On the flipside, renewable energy technology budgets and financial development are evidenced to mitigate EFP. Moreover, the study unveils a U-shaped linkage between economic growth and EFP, which indicates that an increase in income level will boost EFP. Further, the study found causality from economic complexity, democracy, and renewable energy budgets to EFP. Based on these findings, it is pertinent for the G7 countries to increase the manufacturing of sophisticated and complex products. In addition, enhancing renewable energy technology budgets is essential to ensure environmental well-being.
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