Role of economic complexity and technological innovation for ecological footprint in newly industrialized countries: Does geothermal energy consumption matter?

Abstract

This research evaluates how energy (geothermal and coal), economic complexity, and technological innovation impact the ecological footprint in newly industrialized countries (NICs), considering the period 1990–2018. The authors employed economic complexity, technological innovation, and ecological footprint as significant considerations instead of standard environmental and economic parameters. The study used cross-sectional augmented distributed lag (CS-ARDL) and the pairwise Dumitrescu-Hurlin (DH) panel causality to consider the dynamic character of the correlation between the Environment and economic activities. The outcomes of the CS-ARDL showed that economic growth and coal energy intensify ecological footprint in both the long and short run. However, CS-ARDL results revealed that geothermal energy consumption, economic complexity, and technological innovation lessen the ecological footprint in NICs in the long and short run. Finally, the DH causality results revealed a unidirectional causality from geothermal, technological innovation, economic complexity, and coal energy use to ecological footprint. This demonstrates that all the exogenous variables have a predicted power on the ecological footprints in NICs. Based on these findings, policy measures to diversify products have the potential to tackle ecological problems.