Economic Complexity, Ecological Footprint, and the Environmental Kuznets Curve: Findings from Selected Industrialized Countries

Abstract

This article aims to approach the research related to the environmental Kuznets curve from a new and more holistic perspective. Therefore, while testing the validity of the environmental Kuznets curve, the ecological footprint as the indicator of environmental degradation will be used as the dependent variable within the model, while the economic complexity index used together with the per capita income and the trade-to-GDP ratio will be used as the independent variables. The analysis confirms the validity of the environmental Kuznets curve for the top nine industrialized countries in terms of the value-added by industry as a percentage of the GDP between 1970 and 2017. In addition, the study shows that economic complexity decreases an economy’s ecological footprint. According to the results of the causality test, there is a causal relationship from all the independent variables to the ecological footprint variable.