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.