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

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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.

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Data Availability Statement

We will provide data on request. Furthermore, data is available on only following web address. World Bank (2019). World Development Indicators. Washington, DC: World Bank. [Online] Available at: http://data.worldbank.org/products/wdi (September 1st, 2019). Global Footprint Network (2018). Living planet report. Species and spaces, people and places. [Online] Available at: http://data.footprintnetwork.org/#/analyzeTrends?type=EFCtotandcn=5001

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Acknowledgements

The authors are grateful to the editor, associate editor, and anonymous referees of the journal for their extremely useful suggestions for the improvement of this paper.

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Authors and Affiliations

  1. School of Economics, Quaid-I-Azam University, Islamabad, Pakistan

    Isma Samreen & Muhammad Tariq Majeed

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  1. Isma Samreen
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  2. Muhammad Tariq Majeed
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Contributions

Both authors contributed to the study. Main idea of the paper is provided by Majeed. Data collection and analysis were performed by Samreen. The first draft of the manuscript was written by Samreen and Majeed work on the final version of the manuscript.

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Correspondence to Isma Samreen.

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“On behalf of both authors, the corresponding author states that there is no conflict of interest.”

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Samreen, I., Majeed, M.T. Economic development, social–political factors and ecological footprint: a global panel data analysis. SN Bus Econ 2, 132 (2022). https://doi.org/10.1007/s43546-022-00320-4

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