The nexus between economic growth, energy use, international trade and ecological footprints: the role of environmental regulations in N11 countries

Abstract

Diversified human activities and inappropriate economic growth strategies have induced a trade-off between economic growth and environmental degradation worldwide. Consequently, the aggravating environmental concerns have warranted regulations to be enforced for safeguarding the welfare of the global environment. However, the effectiveness of such environmental regulations in reducing environmental deterioration has received equivocal empirical evidence in the literature. Against this backdrop, this study investigates the influence of environmental regulations on the ecological footprints in the context of the Next Eleven countries between 1990 and 2016. The results from the econometric analysis, controlling for cross-sectional dependency issues in the data, reveal that the existing environmental regulations legislated in the Next Eleven countries are ineffective in reducing the ecological footprints of these nations. Besides, greater energy consumption and openness to international trade are found to boost ecological footprints. Moreover, the Environmental Kuznets Curve hypothesis is also authenticated for the panel of the Next Eleven nations. The country-specific findings indicate that energy consumption anonymously degraded the environment in all the eleven nations, while heterogeneous impacts of environmental regulations, economic growth and international trade on the environment are ascertained. Hence, these findings, in a nutshell, recommend the Next Eleven nations to strengthen and enforce the environmental regulations, adopt sustainable economic growth policies, reduce fossil fuel dependency and participate in sustainable trade to ensure environmental sustainability.

Keywords

Environmental regulations / Ecological footprints / Trade / Energy consumption / Economic growth / AMG

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