Economic complexity versus ecological footprint in the era of globalization: evidence from ASEAN countries.

Abstract

The Association of Southeast Asian Nations (ASEAN) countries have witnessed significant growth over the years amidst increase energy consumption, dwindling biocapacity, and increasing ecological footprint (EF). However, while the influence of energy consumption, globalization, and economic growth on EF has been previously examined, the literature is silent as regards the association between the level of skills and knowledge needed in the creation of exported goods and the EF, particularly in the ASEAN region. The current study is a maiden attempt to explore the impact of economic complexity on EF and CO2 emissions in the said region while considering heterogeneity and cross-sectional dependence among countries. From the findings, economic complexity, energy consumption, and economic growth increase EF and CO2 emissions. Globalization reduces the EF, but its impact on CO2 emissions remains unclear. Economic complexity has a more devastating impact in Indonesia, but less severe in Singapore. The direction of causality flows from economic growth, economic complexity, and energy consumption to EF. A feedback causality exists between globalization and EF, and between energy consumption, globalization, and CO2 emissions. The limitations of the study and directions for future research have been highlighted along with relevant policy directions.