Catechizing the Environmental-Impression of Urbanization, Financial Development, and Political Institutions: A Circumstance of Ecological Footprints in 110 Developed and Less-Developed Countries


This study stabs to probe the impact of financial development, urbanization, trade openness, political institutions, and energy consumption on the ecological footprints (EF), within the framework of EKC, of 110 countries congregated by income levels, over the time span of 1996–2016. The final outcome of cross-sectionally weighted Panel EGLS and multi-step A-B GMM evidently reinforced the existence of EKC hypothesis in case of EF both in developed and less-developed countries. This study finds the destructive environmental impact of composition effect and energy consumption while political institutions, trade openness, and urbanization have constructive environmental effect. Financial development reduces the human demand on nature only in less-developed countries. The ultimate consequences of this study are equipped with several policy recommendations for the concerned authorities.

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Fig. 1

Source: Developed by the author based upon data extracted from WDI, World Bank and Global Footprint Network

Fig. 2

Source: Developed by the author based upon data extracted from Global Footprint Network

Fig. 3

Source: Developed by the author based upon data extracted from WDI, World Bank and Global Footprint Network

Fig. 4

Source: Developed by the author based upon data extracted from Global Footprint Network

Fig. 5

Source: Developed by the author based upon data extracted from WDI, World Bank and Global Footprint Network

Fig. 6

Source: Developed by the author based upon data extracted from Global Footprint Network

Fig. 7
Fig. 8
Fig. 9
Fig. 10


  1. 1.

    Greenhouse gasses include CO2, N2O, S2O, CH4, and anthropogenic Fluorinated gasses.

  2. 2.

    Ecological deficit indicates that ecological footprints (natural resources consumption) exceeds the biocapacity (biologically productive area).

  3. 3.

    For definitions of scale, technique, and composition effects see Sect. 1.

  4. 4.

  5. 5.

    Accessed on 15th March, 2018.

  6. 6.

    Governments in less developed countries are compelled to borrow, for economic development, from depository corporations. So, credit by banking sector is a better measure of financial intermediation in less developed countries, than credit to private sector.

  7. 7.

    Liquid liabilities measures the debt obligations payable within a year. It measures the liabilities provision to the economy.

  8. 8.

    CIPS is cross-section augmented IPS Im et al. (2003) unit root test for heterogeneous panels by Pesaran (2007).


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Correspondence to Iftikhar Yasin.

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See Tables 10 and 11.

Table 10 Descriptive statistics of panel A (developed countries)
Table 11 Descriptive statistics of panel B (less-developed countries)

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Yasin, I., Ahmad, N. & Chaudhary, M.A. Catechizing the Environmental-Impression of Urbanization, Financial Development, and Political Institutions: A Circumstance of Ecological Footprints in 110 Developed and Less-Developed Countries. Soc Indic Res 147, 621–649 (2020) doi:10.1007/s11205-019-02163-3

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  • Ecological footprints
  • Urbanization
  • Financial development
  • Political institutions
  • Environmental Kuznets curve
  • GMM