The dynamic impact of urbanization, structural transformation, and technological innovation on ecological footprint and PM2.5: evidence from newly industrialized countries

The rapid increases in ecological footprint and air pollution have followed the fast expansion of the global economy. Urbanization has aggravated environmental strain because of population surge, but the development in the degree of technological innovation would counter balance this negative effect. Hence, in this paper we examine the dynamic impact of urbanization, economic structure, technological innovation and population density on ecological footprint and air quality (PM2.5) in Newly Industrialized Countries (NICs) from 1990 to 2017. The study uses other variables like population density, energy consumption, and life expectancy to find out the long-run relationship among variables. We apply Westerlund co-integration, Mean Group (MG) and Pooled Mean Group (PMG) technique to ascertain the long-run and short-run associations among the variables. For robustness check, we use Augmented Mean Group (AMG) and Common Correlated Mean Group (CCEMG) approach. This study would be the first study in case 10 NICs considered the determinants of ecological footprint and PM2.5. The results reveal that economic growth increases ecological footprint in NICs in long run. Similarly, coefficient of industrialization is positive and significantly related to ecological footprint. However, the service sector shows a negative relation with ecological footprint in NICs. It means service sector helps to improve the environmental quality in long run. Population density, urbanization, energy consumption and life expectancy indicate a positive effect on ecological footprint. Further, in case of PM2.5, the results suggest that economic growth and industrial sectors have high magnitude effects on the PM2.5 than the other variables. The service sector reduces PM2.5, whereas the coefficient value is not significant, but agriculture sector positively influences PM2.5 in NICs. Similarly, population density and urbanization contribution to PM2.5 are positive and significant. Hence, these NICs countries should focus more on the investment in the renewable energy sector and make stringent environmental policy for protecting the nations from environmental issues.