Exploring the impact of globalization, economic complexity, urbanization, and real income on environmental degradation in E-7 countries

Year 2025, Volume: 25 Issue: 1, 201 - 220

Orhan Şimşek , İlkay Güler , Sefa Özbek , Zafer Adalı , Mustafa Naimoğlu

Abstract

Current society has been centered on the edge of calamity induced by environmental degradation. Providing comprehensive scientific evidence and designing reliable and accurate policies have been irreparable initiatives to mitigate and reverse the effects of environmental degradation and harmonize the economy with nature. Within this addressed objective, the study explores the impact of globalization, economic complexity, urbanization, and real income on CO2 emissions, the ecological footprint, and the load capacity factor in 7 Emerging countries (E-7). The study provides comprehensive evidence regarding environmental degradation and environmental quality by handling three environmental-related indicators. The second-generation panel methods involving Durbin–Hausman panel cointegration LM Panel Bootstrap Cointegration Test AMG and CCEMG estimators and Dumitrescu and Hurlin Panel Causality Test are performed on the data spanning from 1995 to 2020. According to the investigation, the explanatory variables are cointegrated with three dependent variables. The study proves that renewable energy and globalization are pivotal factors in lessening environmental degradation and enriching environmental quality. However, urbanization and economic growth impair the environment of E-7 countries, while economic complexity is found to be a statistically significant factor for all environmental-related variables.

Keywords

macroeconomics, sustainable development, ecological footprint, load capacity factor, globalization, urbanization, ecologic complexity index

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