Revealing empirical association among ecological footprints, renewable energy consumption, real income, and financial de
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RESEARCH ARTICLE
Revealing empirical association among ecological footprints, renewable energy consumption, real income, and financial development: a global perspective Syed Asif Ali Naqvi 1 & Syed Ale Raza Shah 1 & Muhammad Abuzar Mehdi 2 Received: 27 April 2020 / Accepted: 30 June 2020 # Springer-Verlag GmbH Germany, part of Springer Nature 2020
Abstract This study quantifies the effect of real income, financial development, trade openness, and renewable energy consumption on the ecological footprint (EFP) of consumption for a panel data of 152 economies during the period 1990–2017. Several panel unit root tests validate that datasets are stationary. The findings from the Westerlund co-integration test depict that variables are cointegrated. The augmented mean group panel algorithm method is then applied to measure the long-run linkage between variables. The analysis outcomes show a negative and significant association between the EFP and real income per capita in the case of the higher-income group while remaining groups depict the other way round relationship. Further, openness and renewable energy consumption are also observed to reduce EFP in the groups of higher-income and upper-middle-income economies. Finally, financial development is observed to lessen environmental degradation in the case of the higher-income group. Similarly, the results of the Granger causality test based on the Dumitrescu-Hurlin panel provided evidence of varied causality relationship among the variables in different income groups. In addition, we also surpassed an impulse response and variance decomposition analysis that permitted to forecast the impact of concerned variables on environmental degradation during the selected period. Finally, the findings from the empirical analysis suggest that per capita economic growth will have an increasing effect on the EFP for the concerned income group except for higher-income countries in the future. Keywords Environment . Economic development . Augmented mean group . Ecological footprint . Renewable energy
Introduction
Responsible editor: Nicholas Apergis Electronic supplementary material The online version of this article (https://doi.org/10.1007/s11356-020-09958-9) contains supplementary material, which is available to authorized users. * Syed Ale Raza Shah [email protected] Syed Asif Ali Naqvi [email protected] Muhammad Abuzar Mehdi [email protected] 1
Department of Economics, Government College University, Faisalabad 38000, Pakistan
2
Department of Economics, Government College Women University, Faisalabad 38000, Pakistan
In recent decades, abrupt extreme meteorological events and global warming have raised the policymakers and researchers’ focus toward the alarming situation of environment degradation (Sarkodie et al. 2020). In the same way, the impact of economic activities by human beings on environmental degradation has also become a serious problem for the world (Ahmed et al. 2020). Ecological assets’ consumption by human beings is more than its growth, and
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