The Impact of Financial Stability, Globalization, and Economic Stability on Ecological Footprint from the Perspective of EKC Hypothesis: New Evidence from a Fourier Panel Data Analysis for BRICS-T Countries

Abstract

The Environmental Kuznets Curve hypothesis, which states that the increase in growth up to a certain income level increases environmental pollution and the increase in growth after reaching this income level decreases environmental pollution, has recently started to be investigated by including economic development and financial development in the framework of this hypothesis to better investigate the hypothesis. This study aims to investigate the impact of financial stability, economic stability, globalization, energy use, and growth on the ecological footprint in Brazil, Russia, India, China, South Africa, and Turkey. In addition, the Environmental Kuznets Curve hypothesis is also tested while examining this relationship. The Panel Fourier approach is applied to test these relationships in Brazil, Russia, India, China, South Africa, and Turkey over the period 1996-2022. The coefficient estimation results show that economic stability, economic globalization, growth, and energy use have a positive impact on the ecological footprint in Brazil, Russia, India, China, South Africa, and Turkey, but financial stability reduces the ecological footprint. Moreover, an inverted-N relationship was found between economic growth and pollution in these countries, which means that the Environmental Kuznets Curve is invalid in these countries in the relevant period. The results obtained from causality analysis support the results of coefficient estimation. Accordingly, a unidirectional causality was found from explanatory variables to the ecological footprint in most of Brazil, Russia, India, China, South Africa, and Turkey.