Interplay between urbanization and ecological footprints: Differential roles of indigenous and foreign innovations in ASEAN-4

Abstract The ASEAN-4 countries namely Indonesia, Malaysia, Philippines and Thailand are experiencing increasing ecological footprints and shrinking biocapacity due to high urbanization rate, heavy reliance on traditional innovations and extensive use of fossil-fuel resources. In these economies, urban areas are the centers of gravity for economic activities and resource consumption. Against this backdrop, the primary interest of this study is to analyze the non-linear effect of urbanization on ecological footprints while considering the differential roles of indigenous and foreign innovations during 1980–2017. The results of Auto regressive distributed leg test uncover that urbanization and ecological footprints do not exhibit an inverted U-shape curve in both short-run and long-run across ASEAN-4. The impact of urbanization recorded relatively higher on ecological footprints in Indonesia and Thailand. Both indigenous and foreign innovations are not conducive to ecological footprints in ASEAN-4. For control variables, population, economic growth and non-renewable energy significantly increase ecological footprints while renewable energy yields rebound effect. These results are also verified by fully modified ordinary least square and dynamic ordinary least square tests. Also, bidirectional causality confirmed between urbanization and ecological footprints in these countries. Finally, several important policy implications are documented aimed at confronting the mounting threat of ecological footprints in these countries.