International Transfer of Ecological Footprint: An Analysis for the Countries with Different Income Levels

Environmental repercussions driven by economic activities have caused developed nations to incur higher costs depending on the adherence to environmental standards adopted along with public pressure. Because of their lower environmental standards, developing countries have secured a competitive cost edge in polluting sectors, attracting foreign direct investment and triggering debates about pollution havens. Such a scenario poses a potential risk of amplified carbon releases (CR) in developing nations. However, foreign direct investments originating from developed nations can enhance management practices, disseminate environmentally friendly advanced technologies, and ultimately reduce CR in developing nations. The primary aim of this study is to examine the effects of economic variables that seem to contribute to the carbon footprint, utilizing data from 10 developed and developing countries. This study investigates the impacts of foreign direct investment, national income, and export variables on the ecological footprint during the period spanning from 2000 to 2022, making use of the CS-ARDL method. The results revealed that the ecological footprint is affected by foreign direct investments, increased national income, and the expansion of exports. It is essential to raise environmental standards to an international level and promote eco-friendly production and growth approaches to reduce the ecological footprint and protect environmental values globally, not just in developed countries. Moreover, policymakers must ensure considering environmental values in foreign direct investments in developing countries, supporting this through regulations, and preventing the exploitation of low environmental quality for export advantages.