Digital economy, resource richness, external conflicts, and ecological footprint: Evidence from emerging countries

Abstract

The overexploitation and unsustainable utilization of important natural resources owing to economic progress have accelerated the negative externalities of overwhelming consumption leading to massive increases in ecological footprint. In addition, the situation of increasing conflicts poses severe challenges, such as energy insecurity, increased fossil fuel use, and environmental unsustainability. However, the transformation of energy systems and economic processes by stimulating clean energy utilization and supporting the process of digitalization may influence resource usage and environmental footprints. Accordingly, this study investigates the impact of natural resources, digital economy and clean energy on ecological footprint in emerging countries from 2003 to 2018 by including external conflicts in the model. The Common Correlated Effects Mean Group (CCEMG) method is employed which produces panel estimates robust to cross-sectional dependence (CSD) and slope heterogeneity. The empirical results indicate that natural resources expand footprints in emerging economies and pose serious threats to ecological quality. However, the digital economy and clean energy help to reduce ecological footprint. In addition, decreasing conflicts curtail ecological footprint while economic progress worsens environmental quality. Based on these estimates, comprehensive policies for energy transition, sustainable natural resource use, and digitalization are directed to support environmental quality.