Pakistan Ecological Footprint and Major Driving Forces, Could Foreign Direct Investment and Agriculture Be Among?

Abstract

Pakistan economy is characterized with good economic performance with agriculture and foreign direct investment (FDI) as pillars of the economy but remains among top emission producing countries. This calls for investigation of the economy with respect to its contribution toward climate change. Many indicators have been proposed as the best measures of environment performance but less consideration to ecological footprint as the right measure of environment, this current study adopts ecological footprint as a proxy to environment performance. FDI and agriculture are equally selected as among the variables in this study. Pakistan country specific data from 1970 to 2018 was applied to this research for clear insight both in short- and long-run investigation. ARDL bound and granger causality tests were applied. FDI and agriculture were found impacting ecological footprint negatively. Causal transmission was found passing to ecological footprint from FDI. Nexus was found among the selected variables pointing toward negative impact on ecological footprint. Hence, pollution haven hypothesis was confirmed for Pakistan. © 2021, The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd.