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Ecological footprint in a global perspective: the role of domestic investment, FDI, democracy and institutional quality

Ongo Nkoa Bruno Emmanuel (Department of Economics, University of Dschang, Dschang, Cameroon)
Dobdinga Cletus Fonchamnyo (Department of Economics, University of Bamenda, Bambili, Cameroon)
Mamadou Asngar Thierry (Department of Economics, University of Chad, N'Djamena, Chad)
Gildas Dohba Dinga (Department of Economics, University of Bamenda, Bambili, Cameroon)

Journal of Global Responsibility

ISSN: 2041-2568

Article publication date: 15 March 2023

Issue publication date: 31 October 2023

1793

Abstract

Purpose

The continuous increase in the negative gap between biocapacity and ecological footprint has remained globally persistent since early 1970. The purpose of this study is to examine the effect of foreign capital, domestic capital formation, institutional quality and democracy on ecological footprint within a global panel of 101 countries from 1995 to 2017.

Design/methodology/approach

The empirical procedure is based on data mix. To this end, this study uses a battery of testing and estimation approaches both conventional (no cross-sectional dependence [CD]) and novel approaches (accounting for CD). Among the battery of estimation techniques used, there are the dynamic ordinary least square, the mean group, the common correlation effect mean group technique, the augmented mean group technique, the Pooled mean group and the dynamic common correlation effect technique with the desire to obtain outcomes robust to heteroskedasticity, endogeneity, cross-correlation and CD among others.

Findings

The estimated outcomes indicate that using different estimators’ domestic capital formation consistently degrades the environment through an increase in ecological footprint, while institutional quality consistently enhances the quality of the environment. Further, the outcome reveals that, though foreign capital inflow degrades the environment, the time period is essential, as it shows a short-run environmental improvement and a long-run environmental degradation. Democratic activities show a mixed outcome with short-run degrading effect and a long-run enhancement effect on environmental quality.

Practical implications

Green investment should be the policy target of all economies, and these policies should be adopted to target both domestic capital and foreign capital alike. Second, the adoption of democratic practices will produce good leaders that will not just design short-term policies to blindfold the populace temporary but those that will produce long-term-oriented practices that will better and enhance the quality of the environment through the reduction of the global footprint. Equally, enhancing the institutional framework like respect for the rule of law in matters of abatement should be encouraged.

Originality/value

Although much research on the role of macroeconomic indicators on environmental quality has been done this far, democratic practices, intuitional quality and domestic capital have been given little attention. This research fills this gap by considering robust empirical techniques.

Keywords

Citation

Emmanuel, O.N.B., Fonchamnyo, D.C., Thierry, M.A. and Dinga, G.D. (2023), "Ecological footprint in a global perspective: the role of domestic investment, FDI, democracy and institutional quality", Journal of Global Responsibility, Vol. 14 No. 4, pp. 431-451. https://doi.org/10.1108/JGR-09-2022-0091

Publisher

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Emerald Publishing Limited

Copyright © 2023, Emerald Publishing Limited

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