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Effects of economic complexity, economic growth, and renewable energy technology budgets on ecological footprint: the role of democratic accountability

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Abstract

The economic structure of countries can influence economic growth, energy demand, and environmental footprints. However, the literature on economic complexity and ecological footprint (EFP) nexus is scarce. Besides, democracy is an important factor that may affect environmental policies and environmental sustainability. Hence, this paper investigates the effect of democracy, economic complexity, and renewable energy technology budgets on the EFP in G7 countries controlling income and financial development from 1985 to 2017. The findings from Westerlund (J Appl Econ 23:193–233, 2008) and other cointegration methods depict cointegration among variables. The long-run estimates from the continuously updated fully modified method unfold that economic complexity contributes to reducing the EFP. However, greater democratic accountability boosts the EFP figures rather than reducing them. On the flipside, renewable energy technology budgets and financial development are evidenced to mitigate EFP. Moreover, the study unveils a U-shaped linkage between economic growth and EFP, which indicates that an increase in income level will boost EFP. Further, the study found causality from economic complexity, democracy, and renewable energy budgets to EFP. Based on these findings, it is pertinent for the G7 countries to increase the manufacturing of sophisticated and complex products. In addition, enhancing renewable energy technology budgets is essential to ensure environmental well-being.

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This research work is funded by ILMA University under the ILMA Research Publication Grant.

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Zahoor Ahmed: conceptualization, data curation, formal analysis, writing of the original manuscript, and writing which included review and editing. Tomiwa Sunday Adebayo: writing of the original manuscript, project supervision, and methodology. Edmund Ntom Udemba: resources, validation, and writing of the original manuscript. Muntasir Murshed: writing of the original manuscript, writing which included review and editing, and validation; Dervis Kirikkaleli: writing of the original manuscript, visualization, and project administration.

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Ahmed, Z., Adebayo, T.S., Udemba, E.N. et al. Effects of economic complexity, economic growth, and renewable energy technology budgets on ecological footprint: the role of democratic accountability. Environ Sci Pollut Res 29, 24925–24940 (2022). https://doi.org/10.1007/s11356-021-17673-2

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