An Analysis of Environmental Constraints in the Context of Urbanization, Finance, Natural Resources, and Globalization

Abstract

This study examines the relationships between ecological footprint and urbanization, financial development, natural resources, human capital, and globalization between 1971 and 2018 using a panel of 8 nations. Furthermore, to enhance comprehension, the research is broadened to incorporate panels that symbolize distinct income brackets: upper middle income (27), lower middle income (30), high income (45), and low income (10). In empirical analysis, dynamic ordinary least squares (DOLS) methods are employed in conjunction with completely modified ordinary least squares (FMOLS). As evidenced by the results, an expanding economy decreases ecological footprint (EF), thereby improving environmental quality. Economic expansion, on the other hand, increases the ecological footprint in lower-middle-income countries. Globalization contributes to an expansion of ecological imprints. Human capital negatively impacts the environment by increasing the efficacy footprint across all panels. Except for those in the lowest income bracket, energy consumption increases EF across all income levels. Natural resources positively influence the ecological footprint across all income categories, except for those in the upper-middle-income and global categories. Urbanization causes an expansion of the ecological footprint, excluding high-income economies. Financial development is associated with an increase in ecological footprint across all sectors, except for lower-middle-income economies. Additional support for our findings was provided by the robustness analysis.