The heterogeneous effect of economic growth on the ecological footprint in OECD countries

Abstract

Organisation for Economic Co-operation and Development (OECD) countries are always being a concern of policymakers because of their high growth and high greenhouse emissions. The objective of this study is to investigate the heterogeneous effect of economic growth on the ecological footprint (EF) in OECD countries, spanning from the year 1995 to 2017. Based on a sample of 36 countries from OECD countries by using distributional heterogeneity in panel quantile regression framework, the result shows there is a non-linear relationship between economic growth and EF across different EF levels. Furthermore, an inverted U-shape exists in the relationship between economic growth and EF which supports the theory of Environmental Kuznets Curve (EKC). These results indicate that the economic growth of these countries increases the environmental pollution initially but reduces it after a certain level of economic growth. The novelty of this study shows that the effects of economic growth on ecological footprint can differ across countries along the line of their ecological footprint level.