Effects of FDI, GDP and energy use on ecological footprint in Finland: An ARDL approach

Abstract

Each economy faces the challenge of escalating carbon emissions, a factor which leads to environmental degradation. This study explores the impact of GDP per capita, FDI and energy use on ecological footprint in Finland during 1990-2021 using the ARDL model and checks the existence of the Environmental Kuznets Curve. Three hypotheses were proposed and empirically tested. The long-run ARDL dynamics show that: (i) GDP negatively influences ecological footprint; (ii) FDI negatively impacts ecological footprint; (iii) energy use positively influences ecological footprint. Another result of the paper is the existence of a U-shaped Environmental Kuznets Curve between GDP and ecological footprint. The findings are deliberated along with policy implications and proposed avenues for future research.