The Ecological Footprint and Trade Openness Nexus: A Case of G-7 Countries

Abstract

The ecological footprint basically aims to measure the impact of humans on the ecosystem. The measurements made include the area required to produce the materials consumed in terms of the consumption footprint and the area required to absorb the carbon dioxide emissions. No distinction is made between domestic and foreign producers in the production by the countries. The countries with the most developed industry and the highest impact on the ecosystem in this sense appear as the countries with the highest footprint in the ecosystem. This study, based on the ecological footprint data of seven industrialized countries (G7) and these countries between 1984 and 2019, aims to reveal the effect of ecological footprints on trade openness. Panel data analysis and ARDL Boundary Test / PMG (Pooled Average Group) method was used to obtain the results. DOLS and FMOLS methods were also used to compare both economic and empirical results and for consistency. As a result of the analysis, as the impact of industrialized countries on the ecosystem increases, their trade openness also increases in the short and long term. This effect could be seen most clearly in the United States (USA), which has the most developed industry. This research paper will be pointed out these important issues.