Abstract
This study examines the heterogenous impact of shadow economy on the ecological footprint. We apply the panel quantile regression to a panel dataset of 32 OECD countries from 1990 to 2015. The estimation results indicate that the shadow economy-ecological footprint nexus follows an inverted U-shaped pattern. Initially, the higher size of the informal economy leads to more ecosystem degradation. When the shadow economy increases to certain thresholds, its environmental impact reverts to benefit. Such threshold changes with the evolution of the ecological footprint. Specifically, it first rises then decreases along with the degradation of the ecosystem. Moreover, the heterogeneous panel causality test reports the one-way directional running from the shadow economy to the ecological footprint in OECD countries. Likewise, environmental effects of other control variables, including trade openness, energy intensity, renewable energy, and income, are also not homogeneous across various levels of the ecological footprint. The significant and heterogeneous relationships between ecological footprint and its determining factors provide insightful implications for governments in tailoring environmental regulations upon different ecological conditions.
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Data availability
All data analyzed during this study are available and freely collected from public sources.
Notes
We thank the anonymous reviewer for suggesting this issue.
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Conceptualization: Lan Khanh Chu; methodology: Lan Khanh Chu; formal analysis and investigation: Lan Khanh Chu, Dung Phuong Hoang; writing — original draft preparation: Dung Phuong Hoang; writing — review and editing: Lan Khanh Chu; supervision: Lan Khanh Chu.
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Chu, L.K., Hoang, D.P. The shadow economy-environmental quality nexus in OECD countries: empirical evidence from panel quantile regression. Environ Sci Pollut Res 29, 65233–65258 (2022). https://doi.org/10.1007/s11356-022-20410-y
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DOI: https://doi.org/10.1007/s11356-022-20410-y