Analysing export quality and ecological footprint nexus: evidence from South Asian countries

Abstract

This study examines the impact of export quality on the ecological footprint (EFP) for selected South Asian economies namely India, Pakistan, Bangladesh, Nepal, and Sri Lanka. The study also checks the presence of the Environmental Kuznets Curve (EKC) hypothesis in these economies over the period 1971–2019. To overcome the heterogeneity issue, the study uses second-generation panel unit root tests, panel cointegration test, cross-sectional dependence tests, slope heterogeneity test, mean group, augmented mean group, and common correlated effects mean group estimator along with fully modified least squares. The coefficient of export quality is negative and significant suggesting export quality is a sustainable indicator. Its interactive impact on per capita income, however, becomes positive and significant implying that export quality boosts EFP by increasing economic growth. The EKC hypothesis is also proved. The study suggests that South Asian countries should work cooperatively to produce high-quality products along with maintaining environmental pressure.