Heterogeneous role of energy utilization, financial development, and economic development in ecological footprint: How far away are developing economies from developed ones

Abstract

This research aims to investigate the impact of energy consumption, financial development, and economic development on the ecological footprint in a panel of 119 developed and developing countries between 2002 and 2018. The study employs panel unit root and autoregressive distributed lag (ARDL) model to achieve this goal. The ARDL results reveal that several factors such as energy consumption, financial development, urbanization, globalization, foreign direct investment, and population growth have a positive relationship with the ecological footprint in developed countries. On the other hand, the human development index and natural resources negatively affect the ecological footprint in developed countries. Moreover, the ARDL results indicate that energy consumption, financial development, urbanization, foreign direct investment, and population growth positively impact the ecological footprint in developing countries in the long run. In contrast, the human development index, natural resources, and globalization have a negative impact on the ecological footprint. These findings imply the need for different policy implications for both developed and developing countries to reduce their ecological footprint.

Keywords: Developed and developing countries; Ecological footprint; Economic growth; Energy consumption; Financial development.