Sectoral innovativeness and environmental sustainability: Unearthing solutions to the resource curse

Abstract

The strain on our planet's resources paints a vivid picture of a world in peril. While discussions examining how changes, driven by economic factors, enhance a sustainable environment have resulted in contradictory evidence, this study argues that the existing measures for structural change do not adequately consider innovation for environmental sustainability. To address this gap, we focus on how sectoral innovativeness (economic change with environmental consideration) across mining, construction, manufacturing and government sectors influences ecological footprint using an expanded stochastic effects by regression on population, wealth, and technology (STIRPAT) model and focusing on Mexico, Indonesia, Nigeria, and Turkey (MINT) nations. Again, we examine how mining innovativeness could contribute to curing the resource curse on the environment.Using the Driscoll Kraay Standard Estimator and data from 2000 to 2020, we have found an inverted U-shape for the relationship between each sectoral innovativeness and ecological footprint. While a positive linear relationship has been found for environmental innovativeness across all sectors and footprint, a negative quadratic effect has been established. Again, we have found that an increase in natural rent raises footprint by 0.0255, but combining resource extraction with mining innovativeness decreases footprint by 0.00634. The study recommends policies directed at consistent investment in environmental innovation because matured technologies contribute to decreased overall ecological footprints.