Navigating sustainability: how export diversification influences ecological footprints in developed and developing countries

Environmental sustainability has become a critical global challenge, driving researchers and policymakers to explore solutions that balance economic growth with ecological preservation. As nations strive to achieve the United Nations Sustainable Development Goals (SDGs), understanding the relationship between trade structures and environmental impact is more crucial than ever. To do so, this paper intends to examine the effect of export diversification on the ecological footprint in 87 countries, utilizing annual data from 1995 to 2014. Since per capita ecological footprint of consumption is considered as a thorough indicator of environmental degradation, it has been used as the dependent variable (Ulucak and Bilgili in J Clean Prod 188:144–157, 2018). Additionally, export diversification is measured using the Theil entropy index, along with its intensive and extensive margins, based on data from the IMF. The intensive, extensive, and overall Theil indices were calculated according to the definitions and methods outlined by (Cadot et al. in Rev Econ Stat 93:590–605, 2011). Using a panel Autoregressive Distributed Lag (ARDL) model, the findings indicate that both the intensive and extensive margins of export diversification contribute to reducing the ecological footprint. Specifically, in developing economies, diversification in the intensive margin positively impacts the environment. Conversely, in developed economies, export concentration in the intensive margin is linked with a decrease in the ecological footprint. These findings underscore the importance of effective export diversification strategies for sustainable economic development in developing economies, while encouraging developed countries to prioritize the export of green technologies and investments to aid in addressing global environmental challenges. Policies aligned with the United Nations Sustainable Development Goals (SDGs) are essential in both developed and developing economies to address the interconnections among various SDGs and, in turn, enhance ecosystem sustainability.