The dynamic impact of natural resources, technological innovations and economic growth on ecological footprint: An advanced panel data estimation

Abstract

Abstract The relationship between natural resources and the ecological footprint has critical environmental implications. However, as critical as it is, this domain is insufficiently examined by researchers, and shows ambiguous results. Moreover, these studies do not address the role of technological innovation in shaping the ecological footprint, in an open and explicit manner. Therefore, realizing the need for a more critical evaluation of the intricacies involved in studying the ecological footprint, this study analyzes the linkages between natural resources, technological innovations, economic growth, and the resulting ecological footprint in emerging economies. Drawing on the data from 1984 to 2016, we employed the second-generation panel cointegration methodologies to study the findings of this research. Results of Pesaran's CD test and P&Y's slope homogeneity test confirm the existence of a slope heterogeneity across countries, and correlation amongst cross-sectional units. Moreover, Cointegration results confirm a stable, long-run relationship between the ecological footprint, natural resources, technological innovations, and economic growth. In the long run, natural resources and economic growth increase and expand the ecological footprint, while technological innovations are helpful in abating environmental degradation that takes place a result of this phenomenon. Furthermore, the quadric term for economic growth showed a negative impact on the ecological footprint, i.e., in the presence of the Environment Kuznets Curve (EKC) hypothesis. Additionally, the results from CS-ARDL were reconfirmed by utilizing the Augmented Mean Group (AMG) method. Also, the result of the Dumitrescu-Hurlin Granger causality test shows that any policy to target natural resources, technological innovations, and economic growth significantly alters the ecological footprint and vice versa. Our key findings lead towards the manifestation and emphasis of the importance of appropriate policies for restoring natural resources and at the same time, upgrading technological innovations in order to attain sustainable development goals.